Australian Stocks Fell 1%, Qantas on Defensive

123jump.com Staff
03 Jan, 2008
New York City

Australian stocks declined as investors worried that rising metals and oil prices and growing fears of recession in the U.S. may drag the world economy. Australian dollar fell against yen. Centro rose 7% after local reports suggested that Blackstone and Citadel may bid for its properties. The strongly worded statement from the new immigration minister may stop Qantas plan to hire temporary skilled foreign workers.

[R]5:00AM New York, 9:00PM Sydney - ASX 200 index declined 1% after broader market worried about the U.S. economy.[/R]

ASX 200 index lost 1% or 62.50 to close at 6,290.70.

The Preliminary market turnover was 1.33 billion, worth $3.56 billion, with 460 stocks moving up, 725 moving down, and 312 unchanged. The most actively traded stock was Retail Star with 131.7 million shares worth $3.3 million.

National Australia Bank Ltd. led lenders lower on the prospect that slowing U.S. economic growth will worsen the current credit-market crisis. Westfield Group lost 4% and News Corp declined 3.7%. The U.S. markets in the overnight trading declined more than 1.7%.

Newcrest Mining Ltd. jumped to a record as gold prices rose to a three-decade high of $860 an ounce. Gold traded in 1978 at $873 an ounce.

Newcrest Mining Gold extended a seven-day rally as the U.S. dollar weakened, boosting the appeal of the precious metal as a hedge against inflation. Bullion for February delivery recently traded at $858 an ounce, after rising to a record $860.10 an ounce yesterday.

Newcrest Mining added 10.2% and Lihir Gold Ltd was up 5.8%. Woodside gained 1.6%, Oil Search added 3.3% and Santos was up 2.8% after crude oil rose to $100 a barrel for the first time in New York as global fuel consumption threatens to outpace production.

Crude oil rose $3.320 to close at $99.30 per barrel for a front month contract in New York Mercantile Exchange trading, natural gas increased 37 cents to $7.859 per mBtu, and gasoline futures increased 7.22 cents to close at 256.30 cents per gallon.

Crude oil futures in the U.S. trading crossed a previous intra-day high $99.29 on the rising worries that the U.S. weekly inventory report due to be released tomorrow will show another decline in inventories and growing violence in Nigeria. Natural gas and heating oil rose nearly 5% on the harsh winter in the North East region of the U.S.

Separately, Woodside and Santos resumed production at their oil fields off the northwest coast of Australia yesterday after they were shut down by a tropical cyclone.

Woodside Petroleum Ltd. climbed as oil traded near $100 a barrel.

Qantas today ruled out possibilities of it importing temporary skilled workers to break the effect of a looming strike by 1,700 of its maintenance workers. The new Immigration Minister Chris Evans issued a strongly worded a message that the Labor Government will not tolerate the temporary skilled migration scheme.

Qantas has been grappling with a series of contingency plans to reduce the impact of the industrial action but it has been dogged by reports that it had been considering importing foreign engineers on so-called 457 temporary work visas to replace the striking workforce and keep flying next week.

The Australian Licensed Engineers Association (ALAEA) wants Qantas to agree to a 5% pay rise but the company is offering 3% with another 1% in superannuating. Qantas could potentially source engineers from Jetstar but this may not be enough. Qantas'' share shed 0.2%.

Centro Properties Group share gained 7.7% today after unconfirmed media reports that Blackstone Group and Citadel Investment Group may consider bidding for Centro’s properties. AMP Ltd. and DB Trust have also expressed interest.

Centro put itself on the market when it announced yesterday that it is willing to sell all its assets including its 700 malls in the United State as it struggles to raise money to refinance its $3.9 billion (US$3.4 billion) of debt. The Group also invited bids for stakes in his Australian and U.S. wholesale fund management and distribution which Centro values at $3.7 billion.

Centro Properties lost more than 80% of its market value as a result of the announcement.



The Australian dollar traded at $0.8831/34, up from yesterday''s close of $0.8797/00.

Of the ASX 200 index shares, Sino Gold Mining led the gainers with a rise of 13.4% followed by increases in Newcrest Mining of 10.2%, in AED Oil Limited of 7.9%, in Centro Properties of 7.7%, and in Nexus Energy Limited of 6.9%.

Of the ASX 200 index stocks APN/UKA European led the decliners with a fall of 7% followed by losses in Timbercorp Limited of 5.3%, in Bradken of 5.2%, in Goodman Group of 5.2 and in Valad Property of 5.1%.

In the media sector Consolidated Media Holdings was down 1.9%, News Corp lost 3.7%, and Fairfax Media declined 1.3%.

In other sectors resource stocks were down with BHP Billiton declining 0.5% and Rio Tint shedding 1.8%. In the banking sector, ANZ shed 0.9%, Westpac lost 1.7%, Commonwealth Bank of Australia declined 1.8% and the National Australia Bank lost 1.4%.

Retailers stocks were mixed, with Wesfarmers gaining 0.5%, Woolworths losing 0.9% and David Jones declining 2.4%.