Austraiian indexes Drop 2% on Sustained Selling by Foreign Investors

Marcus Jacob
21 Sep, 2015
New York City

Market sentiment was negative in Australian trading after indexes in New York dropped at the close of Friday. Resource and banking stocks led the decliners in Sydney trading. Lynas Corp said fiscal year loss narrowed.

[R]5:30 PM Sydney, Australia – Market sentiment was negative in Australian trading after indexes in New York dropped at the close of Friday. Resource and banking stocks led the decliners in Sydney trading. Lynas Corp said fiscal year loss narrowed.[/R]

Australian market indexes plunged nearly 2% after weak market close in New York in overnight trading.

Resource sector led the decliners and banks also dropped between 1% and 4%.

Foreign investors trimmed holdings on the growing political and economic uncertainties. Australian budget deficit is expected balloon and exports are likely to fall short of estimates.

Australian dollar closed at 71.70 U.S. cents and in stock trading turnover plunged to 675 million shares worth $4.4 billion.

At close, the ASX 200 Index declined 104.30 or 2% to 5,066.20 and the broader All Ordinaries Index slumped 98 to 5,096.30.

In commodities trading, gold jumped US$10 to US$1,140 an ounce and Brent crude future for immediate month delivery gained 51 cents to US$47.98 a barrel.

IPO

Platinum Asia Investments Limited fell 0.5% to 98.5 cents after the investment company priced its stock at $1.

The stock opened at 99 cents and closed at 98.5 cents.

Australian Stock Movers

Alliance Aviation Services Ltd surged 7.2% to 52 cents after the aircraft charter services provider secured a new five-year contract from BHP Billiton to maintain service at Olympic Dam through June 2021.

The company also won a 12-month contract extension with Citic Pacific Mining to fly between Perth and Karratha.

Separately, Alliance launched including new flights in Western Australia to Christmas Creek and between Perth, Newman and Port Hedland.

Lynas Corporation Limited decreased 2.6% to 0.037 cents after the rare earth metals mining company said revenues in the year ending in June surged 123.8% from a year ago to $144.6 million.

Net loss in the year narrowed to $118.7 million compared to $345.5 million and diluted loss per share decreased to 3.82 cents from 15.41 cents.

Syrah Resources Ltd dropped 2.6% to $2.63 after the diversified exploration company reaffirmed it is on track to reach it production target by fiscal first-quarter 2017.

Separately, the company raised approx $211 million to finance the Balama Project in Mozambique.

Summerset Group Holdings Ltd closed unchanged at $3.61 and the company received an approval to build a retirement village in Christchurch, New Zealand with an estimated cost of about $100 million.

The project work is expected to commence in early 2017.

Worleyparsons Limited slumped 3.7% to $6.26 and the engineering construction company secured a contract worth C$164 million to provide pipe fabrication and field construction services for the Cutback Ridge’s gas plant project in Canada.