BHP, Woolworths Lift Australia

123jump.com Staff
23 Oct, 2007
New York City

Stocks in Australia closed higher led by mining, banking, and retailing sectors. ASX 200 index ganiend 1.3% to close at 6,660.90. BHP edged higher after its third quarter production report showed production increase of 7% in iron ore, 23% in copper, but 13% decline in Nickel. Woolworths sales increased 8.9% in the fist quarter of the fiscal 2008 on the strength in general merchandise sales. Qantas added 4% after its subsidiary Jetstar plans to launche discount flights to Europe.

[R]5:00AM New York, 6:00PM Tokyo - The Australia index rise on banking and mining stocks by 1.3%.[/R]

In Sydney trading ASX 200 Index gained 1.3% or 83.6 to 6,660.90. BHP added 0.2% and RTP increased 0.9%. Preliminary stock turnover was 1.67 billion shares worth $6.59 billion, with 811 stocks up, 447 down, and 339 unchanged. Pacrim Energy led the most active stocks list with 34.37 million shares changing hands worth $1.12 million.

BHP Billiton Ltd today released its third quarter production report indicating 7% increase in iron ore output for the three months period to September 30th to a record 25.9 million tons against 24.2 million tons for the corresponding period last year.

According to the company the quarterly production record achieved for iron ore was underpinned by strong demand and a rapid growth in the company''s Western Australia Iron Ore Project 2 which achieved nameplate capacity during the current quarter.

The company said that other projects that performed above expectation in iron ore production included Worsley, Western Australia Iron Ore, Illawarra Coal, Hunter Valley Coal (all Australia), Hillside (South Africa), Samarco (Brazil), and Cerrejon Coal (Colombia) operations.

The company also achieved record for natural gas and natural gas liquids at Bass Strait (Australia) and silver at Escondida (Chile) and Antamina (Peru) while Petroleum production at 30.34 million barrels of oil was in line with prior periods reflecting strong facility and reservoir performance offsetting natural field decline.

The company''s largest profit contributor included base metals, such as copper, which accounted for a third of pretax earnings.

Copper production rose 23% to 307,800 tons. Unplanned smelter maintenance and lower mining grades at its Olympic Dam copper, gold, and uranium mine slowed copper production growth in the quarter.

Nickel production dropped 13% to 38,600 tons because of planned maintenance at the Kalgoorlie nickel smelter and the Yabulu refinery, both in Australia, the company said.

Woolworths Ltd reported 8.9% jump in first quarter sales during the three months ended Sept 30th for the fiscal year 2008. The company grossed A$11.696 billion, compared to A$10.7443 billion in the first quarter of the 2007 financial year. Woolworths stocks jumped 2.5% on the news and lifted Cole Meyers by 1.2%.

The general merchandise division sales increased 16.5% during the quarter to $1.301 billion from A$1.117 billion while supermarket sales rose 8% to $10.058 billion from A$9.316 billion from a year ago.

Woolworths chief executive Michael Luscombe said he was pleased with the momentum of the business, though discretionary spending continued to be influenced by fluctuating petrol prices and higher interest rates.

""""""""We have maintained the strong momentum in all our businesses. Particularly pleasing are the excellent results from BIG W and New Zealand Supermarkets,"""""""" he said.

New Zealand Supermarkets achieved sales of $1.07 billion for the quarter, an increase of 14.7 per cent, with comparable sales rising 9.9%.

BIG W sales grew by 16.6% in the first quarter, with comparable store sales increasing 9.6% as a result of its repositioning and higher level of discounting and store improvements.

A rally in global stocks gave investors the confidence to buy higher-yielding assets and propelled the Australian dollars to its biggest rise in a month. The Australian dollar rose 1.2% to $0.8890, from 0.8786.

Of the ASX 200 index shares, Fortescue led the gainers with a rise of 6.1% followed by increases in Minara Resources by 6%, in Futuris Corporation Limited by 5.8%, in Mount Gibson Iron by 5.3%, and in Pacific Brands by 5.1%.

Of the ASX 200 index stocks Sino Gold Mining led the decliners with a fall of 2.7% followed by losses in Lynas Corporation Limited of 2.8%, Iress Market Tec of 3.2%, Iluka Resources on 3.2% and Aristocrat Leisure of 7.2%.

Banks traded higher on the deal between China based Citic Securities and the U.S. based Bear Stearns. Macquarie Bank gained 2.6%, Westpac Banking increased 1.8%, National Australia Bank added 1.7%, Commonwealth Bank of Australia increased 0.8%, and Australia and New Zealand bank edged up 1.5%.

In the energy sector, Woodside Petroleum was unchanged, Santos added 1.4%, and Oil Search rose by 3.6% after it reiterated its production guidance for the full year.

Gold stocks rallied, with Newcrest adding 1.1% after reporting an 18% rise in first quarter production and Lihir Gold gained by 1.7%. Oxiana jumped 4.4% after the company said that it plans to expand its copper and gold mining operations at Prominent Hill location.

Pacific Brands added 5.1% after indicating it was well placed to deliver at least 10% profit growth this financial year.

In the media sector, News Corp was up 1.9% after its non-voting stock lifted 59 cents to $24.54 while Publishing and Broadcasting strengthened 0.3% and Fairfax firmed 0.4%.

Qantas added 3.9% after reports that its subsidiary, Jetstar, a low-cost airline, will introduce flights to Europe from Australia via a Southeast Asian airport in early 2009.

Among other stocks, Symbion Health edged higher 0.3% as it said it would pursue its revised merger proposal with Healthscope Ltd. Primary Health Care, one of the largest shareholder said that it will vote against the deal.

Futuris Corporation surged 5.8% after indicating that it would sell its 43% stake in beef producer Australian Agricultural Company.