Iron Prices Drop to 20-month Low, Australian New Home Sales Rise 2.9%

Marcus Jacob
29 May, 2014
New York City

Australian market indexes closed lower and investors turned cautious after spot iron ore price dropped below $97 a ton. Australian private capital expenditure declined 4.2% and new home sales in April increased 2.9%.

[R]5:00 PM Sydney – Australian market indexes closed lower and investors turned cautious after spot iron ore price dropped below $97 a ton. Australian private capital expenditure declined 4.2% and new home sales in April increased 2.9%.[/R]

Investors in Sydney turned cautious after spot price for iron ore dropped below $97 a ton and private capital expenditure declined.

Private capital expenditure in the March quarter declined 4.2% after adjusting for season factors from the revised 4.5% fall in the December quarter, the ABS reported today.

The December quarter decline in private capital expenditure was revised to 4.5% from the previous estimate of 5.2%.

A private survey conducted by the Housing Industry Association said new home sales increased 2.9% in April. The industry association also highlighted in the report that the Australian economic growth is becoming more dependent on the housing sector.

Australian dollar jumped to 92.96 U.S. cents and stock market trading turnover dropped to 552 million shares worth $3.33 billion.

ASX 200 index fell 7.70 to 5,519.50 and the broader All Ordinaries slid 7.50 to 5,499.20.

Stocks in Review

Rio Tinto dropped $1.33 or 2.2% to $60.07. BHP dropped 50 cents to $37.49. Woodside Petroleum Limited slid 0.3% to $42.

Westpac Banking Corp added 2 cents to $34.52.

Iluka Resources Limited fell 0.7% to $9.02 after the zircon and titanium dioxide miner forecasted total sales of zircon rutile and synthetic rutile for the year to exceed 580,000 tons in the previous year.

New Hope Corporation Limited dropped 2% to $2.92 after the coal miner said production of saleable coal for the quarter ending in April rose by 18% on-year to 1.43 million metric tons. Coal sales, however, fell 17% to 1.33 million tons.

The company said coal sales plunged 17% to 1.33 million tons and blamed uneven shipping schedule for the decline.

Range Resources Ltd surged 23.1% to 0.016 cents after the oil & gas explorer received US$12 million from a Hong Kong-based private investor Abraham Limited.

Toll Holdings Limited climbed 4.9% to $5.53 after the transport and logistic services provider said from the next financial year the company will consolidate its six divisions to five. After restructuring the business it expected to save between $10 million to $12 million for the year.

The company said it will cut around 100 jobs from its current total employment of 45,000.