Australian Index Extend Gains, Metcash Plunged 10%

Marcus Jacob
21 Mar, 2014
New York City

Australian market indexes advanced in heavy trading and the Aussie dollar traded above 90 U.S. cents. Four largest Australian banks are leading the global capital raising plan of $7.2 billion to fund Roy Hill iron ore mining project. Metcash plunged 10%. Cochlear gained 3%.

[R]5:00 PM Sydney – Australian market indexes advanced in heavy trading and the Aussie dollar traded above 90 U.S. cents. Four largest Australian banks are leading the global capital raising plan of $7.2 billion to fund Roy Hill iron ore mining project. Metcash plunged 10%. Cochlear gained 3%.[/R]

Australian stocks opened higher and during the session advanced and at close added 0.8%. The market sentiment was positive after investors focused on domestic corporate news.

Australian dollar closed at 90.64 U.S. cents and stock market trading turnover slid to 1.13 billion shares worth $5.36 billion.

The ASX 200 index gained 44.10 or 0.8% to 5,338.10 and the broader All Ordinaries increased 41.30 to 5,354.

Stocks in Review

Rio Tinto rose 57 cents to $61.37. BHP gained 38 cents to $35.58. Woodside Petroleum Limited jumped 62 to $38.43.

Westpac Banking Corp increased 36 cents to $33.60 and Commonwealth Bank gained 0.9% to $75.66.

Australia’s four largest banks are leading the effort to finance $7.2 billion Roy Hill project development that is 70% controlled by Gina Reinhart’s company. The

Cochlear Limited climbed 4.2% to $58.96 after the U.S. Food and Drug Administration approved the use of the implantable device for adults with severe hearing loss of high-frequency sounds.

Metcash Limited plunged 9.5% to $2.85 after the wholesale distributor lowered its profit outlook.

The wholesaler said its capital expenditure estimated to reach between $150 million and $180 million in 2015 and drop to between $130 million and $150 million in 2016 and 2017.

The company estimated earnings per share in the year ending April to fall between 13% and 15%.

Metcash also intends to invest approx $700 million up to 2018 in a transformation plan.

Westfield Group gained 0.7% to $10.29 after the mall developer and operation agreed to sell three of its U.K. shopping centers for more than $1.4 billion or £868 million.

The company the move is in accordance with the plan to separate its Australian and international shopping centres businesses into two trusts.