Australia Halts 3-day Rally; Mount Gibson Plunges 50%, Bradken Soars

Marcus Jacob
05 Dec, 2014
New York City

Australian market indexes halted a three-day rally and the Aussie dollar weakened following persistent weakness in resource prices. In active trading, market indexes trimmed weekly gains. Bradken Limited soared on a takeover proposal. Mount Gibson Iron Ltd plunged 50% on a iron mine closure.

[R]5:30 PM Sydney – Australian market indexes halted a three-day rally and the Aussie dollar weakened following persistent weakness in resource prices. In active trading, market indexes trimmed weekly gains. Bradken Limited soared on a takeover proposal. Mount Gibson Iron Ltd plunged 50% on a iron mine closure.[/R]

In active trading, stocks in Sydney trading eased and market indexes weakened after gains of three days.

The Aussie dollar declined as weakness in crude oil and gold prices continued and analysts speculated oil to drop as low as $40 a barrel in the next eighteen months.

The Australian Industry Group and the Housing Industry Association reported headline index of construction sector in November dropped to 45.4 from 53.4 in October.

Australian dollar closed at 83.76 U.S. cents and in stock-trading turnover rose to 808 million shares worth $4.5 billion.

ASX 200 Index slipped 33.50 or 0.6% to 5,335.30 and broader All Ordinaries Index fell 31.80 to 5,313.60.

In commodities trading, gold slid US$3 to US$1,203 an ounce and light crude oil decreased 57 cents to US$66.81 a barrel.

Australian Stock Movers

Bradken Limited surged 36.5% to $4.53 after the mining and earthmoving equipment maker received non-binding indicative proposal from a consortium Pacific Equity Partners Pty Limited and Bain Capital Asia, LLC for $5.10 per share or about $872 million.

Bradken said it consider revised cut-price takeover proposal from the consortium, as in August offer was for $6 per share.

Leighton Holdings Limited fell 0.4% to $21.10 after the construction company secured contract worth $150 million to widen M4 motorway in Sydney.

Mount Gibson Iron Limited plummeted 50% to 20.5 cents after the iron ore producer plans to close its Koolan Island iron ore mine in Western Australia and lowered its full-year sales guidance.

Washington H. Soul Pattinson and Co. Ltd slipped 0.6% to $14.32 after the industrial investment company reported strong first-quarter results from its associated companies.

Brickworks estimated pre-tax profit for the first-quarter of fiscal 2015 soared 38% to $13.2 million.

TPG Telecom forecasted EBITDA for the quarter in the range of $455 million and $460 million from $364 million reported in this year.