Australian Stocks Climb, Energy Plays Prevail

123jump.com Staff
30 Dec, 2008
New York City

Energy stocks lent support to ASX 200 on Tuesday amid rising concerns over the conflict in the Middle East. Fears of a ground operation launched by Israel in Gaza sent oil prices higher.

[R]3:00AM New York, 7:00PM Sydney- Soaring oil prices lead Australian stocks higher. Qantas Airways to slash domestic fuel surcharges.[/R]

Australian stocks advanced 0.9% buoyed by energy stocks as crude oil prices continued to climb on rising hostilities in the Middle East.

In Sydney trading the ASX 200 index rose 0.9% or 33.1 to 3,654.20.

Of the ASX 200 index stocks, 120 increased, 58 declined, and 22 were unchanged. Lynas Corp. led gainers in the index shares with a rise of 21.7% followed by Babcock & Brown increasing 20.5%.

Oil Prices Rise Above $40

Oil prices soared more than 6% to $40 per barrel today after the escalating conflict between Israel and Hamas ignited worries that it will spread to neighbouring oil producing countries and disrupt supplies.

Israel also stoked fears of a major disruption by intimating that it might launch a ground operation in Gaza as Hamas missile attacks persist.

Gold prices also remain high on a sliding U.S. dollar.

Qantas to Remove Domestic Fuel Surchages

Qantas Airways reported today that it will scrap its domestic fuel surcharges for tickets issued on or after January 1, 2009.

The airlines general executive manager John Borghetti said today the company had lowered domestic and international airfares twice in recent months.

Barghetti added that predominantly low oil prices have necessitated the removal of A$18 per sector fuel surcharge that applies to all Qantas domestic and Qantas Link bookings.

However, international surcharges will remain in place on higher fuel costs associated with international operations.

According to the report, the company’s 2008-2009 fuel bill will remain A$400 million higher than the last financial year.

“Prices remain volatile. Oil was trading as low as US$32.40 a barrel on December 19, but today is back up to US$40 a barrel, an increase of more than 20%. Jet fuel refining margins paid by airlines are also higher. The margin, which was around US$5.40 in May 2004, is approximately US$17 today,” said Borghetti.

Gainers & Losers

Lynas Corp. led advancers in the ASX 200 index with a rise of 21.7% followed by increases in Babcock & Brown of 20.5%, in Kagara Ltd. of 16.7%, in Pacific Brands of 16%, and Linc Energy of 15.8%.

Energy stocks edged up after crude oil prices climbed 6% to $40 per barrel on fears the conflict in the Middle East will disrupt oil supplies. Felix Resources gained 12.5% and Mincor Resources jumped 12.2%.

Macquarie Office led decliners in the ASX 200 index shares with a drop of 8.6% followed by losses in Handerson-CDI of 5.7%, in ING Office Fund of 5.3%, in Dexus Property Group of 5.1%, and Platinum Australia of 4.7%.

Realty stocks fell after funding costs at Australian banks increased. CFS Retail Property fell 4.6% and Australand Property shed 4%.