Weak Asian Markets Drag Australian Stocks Lower, China Worries Loom

Marcus Jacob
24 Jun, 2013
New York City

Australian stocks closed lower after iron ore prices declined and the dollar dropped to the new low in the year. Leighton Holdings won an extension of contract from Fortescue Metals by $1.3 billion to $2.8 billion. Rio Tinto decided to keep its diamond business.

[R]5:30 PM Sydney – Australian stocks closed lower after iron ore prices declined and the dollar dropped to the new low in the year. Leighton Holdings won an extension of contract from Fortescue Metals by $1.3 billion to $2.8 billion. Rio Tinto decided to keep its diamond business.[/R]

Australian stocks extended losses on the first day of trading this week after Asian markets sold off sharply.

The ongoing worries of a cash crunch at Chinese banks contributed to a 5.3% nosedive in the Shanghai Composite Index and prompted fears that the second largest economy in the world may be heading for a slowdown.

The ASX 200 index declined 70 points to close at 4,669 and in trading, 807 million shares changed hands worth $4.1 billion.

Markets in Hong Kong dropped 2.2% and in Malaysia, Indonesia, Singapore and India declined between 1% and 2%.

Stocks in Review

Tatts Group Limited closed down 0.6% to $3.09 despite the company won a court ruling against Victorian government for $40 tax levy on gambling machines it does not operate.

iSelect Limited priced its public offering at $1.85 a share. The stock opened at $1.76 and closed down 15% at $1.56.

Leighton Holdings Limited declined 1.2% to $14.95 after the company won an extension of a contract with Fortescue Metals Group. The iron ore miner increased its contract by $1.3 billion to $2.8 billion.

Separately, Leighton also secured commitment to refinance its $1 billion for a syndicated cash advance facility.

Rio Tinto declined 2% in a global selloff in resource sector and the mining company decided to hold on to its diamond business on solid fundamentals for business in Asia and North America.

Prima BioMed Limited soared 11% before the stock was halted for a company announcement that its lead drug candidate has entered into clinical trial extension.