Australian Index Rises 1.6%, BHP to Cut U.S. Shale Production by 40%

Marcus Jacob
21 Jan, 2015
New York City

Australian indexes surged 1.6% following the advance in global markets and the Aussie dollar edged up. BHP reported quarterly production of iron ore increased 16% and also confirmed plans to cut shale oil exploration by 40% in the U.S.

[R]5:30 PM Sydney – Australian indexes surged 1.6% following the advance in global markets and the Aussie dollar edged up. BHP reported quarterly production of iron ore increased 16% and also confirmed plans to cut shale oil exploration by 40% in the U.S.[/R]

Australian stocks advanced in active trading following the rebound in global markets and BHP reported 16% increase in iron ore production.

On the economic front, the latest sentiment index from Westpac Bank showed seasonally adjusted consumer confidence bounced back in January to 2.4% to 93.2, followed by 5.7% decline to 91.1 in December.

Australian dollar closed at 82.12 U.S. cents and in stock-trading turnover increased to 712 million shares worth $4.62 billion.

ASX 200 Index jumped 85.70 or 1.6% to 5,393.40 and broader All Ordinaries Index gained 80.60 to 5,367.40.

In commodities trading, gold climbed US$21 at US$1,298 an ounce and light crude oil declined US$2.66 to US$46.47 a barrel. Brent crude declined 47 cents to close at US$49.51 a barrel.

Australian Stock Movers

BHP Billiton Limited jumped 2.1% to $28.05 after the diversified natural resources company said iron ore production in the second quarter surged 16% to 56.35 million tons and 113.44 million tons in the first-half from the year ago period.

BHP said production of metallurgical coal in the quarter climbed 17% to 13.54 million tons and jumped 21% to 26.31 million tons from the same period a year ago.

The production of copper in the second-quarter fell 4% to 423,700 tons and output of nickel declined 10% to 34,200 tons from last year.

Energy coal production increased 5% to 18.62 million tons from a year ago.

The company also said it plans to reduce shale drilling activity in the U.S. by about 40% or more in response to decline the oil price.

The miner forecasted impairments charges in first-half earnings results will be of about $250 million.

BKI Investment Co Ltd gained 1.5% to $1.64 after the investment company said net profit in the first-half ending in December climbed 19.9% to $22.9 million form $19.1 million a year ago period.

Senex Energy Ltd slipped 1.9% to 26 cents after the oil and gas explorer reported production in the fourth-quarter ending in December fell 5.3% to 0.36 million barrels of oil equivalent.

The company said revenues in the quarter declined 36.6% to $28.2 million from a year ago period and plunged 33.5% on sequential basis.

Saracen Mineral Holdings Limited surged 14.1% to 40.5 cents after the metals and mineral explorer said gold production in the fourth-quarter ending in December climbed 16% to 42,894 ounces.

The company said total gold hedging is in place of 185,743 ounces at an average price of $1,539 per ounce.