Australian Indexes Plunge After OPEC Decision

Marcus Jacob
28 Nov, 2014
New York City

Australian market indexes opened lower and the crude oil prices plunged below $70 a barrel after the OPEC member nations left the oil production level unchanged. Qantas Airways surged and the airline announced investment in Jetstar Japan.

[R]5:30 PM Sydney – Australian market indexes opened lower and the crude oil prices plunged below $70 a barrel after the OPEC member nations left the oil production level unchanged. Qantas Airways surged and the airline announced investment in Jetstar Japan.[/R]

Australian market indexes traded lower after the much awaited OPEC meeting left the crude oil production unchanged despite the demand lagging the supply.

Saudi Arabia fended off the calls from several member nations to cut production despite several reports suggesting that the demand increase is stalling and the supply is ahead of the demand by at least one million barrels a day.

International market reaction was swift yesterday, and the crude oil futures fell more than $4 a barrel and the prices dropped to a 4-year low below $70 a barrel.

Australian dollar declined to 84.91 U.S. cents and in stock-trading turnover jumped to 783 million shares worth $6.34 billion.

ASX 200 Index dropped 87.90 or 1.6% to 5,313 and broader All Ordinaries Index slumped 83.30 to 5,298.10. For the week, ASX 200 rose 0.4% and for the month declined 2.3%.

In commodities trading, gold plunged US$5 to US$1,185 an ounce and light crude oil tumbled $4.64 to US$69.05 a barrel.

Australian Stock Movers

eCargo Holdings Limited completed its public offering and issued shares at 40 cents a share and closed at 35.5 cents.

Mustera Property Group Limited completed its public offering and priced its shares at 20 cents each. The real estate investment company’s stock closed at 21 cents.

Qantas Airways Limited surged 6.9% to $1.92 after the airline company reported total passengers in October increased 1.6% but the group capacity slipped 0.1% and revenue passenger kilometer jumped 2.9% from a year ago month.

For the year, the airline company said total passenger count climbed 2.7% and capacity increased 0.8% from a year ago period.

Rey Resources Limited closed unchanged at 0.09 cents after the coal resources explorer agreed to acquire 50% stake in petroleum exploration license at ‘Derby Block’ in Western Australia.

Sedgman Limited gained 1% to 52 cents after the mining project and service provider secured a contract worth $59.8 million to engineer and construct a filtration plant at Kwinana refinery in Western Australia controlled by Alcoa Inc.

Rio Tinto Limited jumped 1.9% to $59.10 after the mining company said it is on track to deliver sustainable cash returns to shareholders in 2015 but deferred investment decision for the proposed billion-dollar green-field iron ore mine in Pilbara region, amid a drop in iron ore prices.