Stocks in Sydney Fall 1.4%, Rio Tinto Plunges

Darlington Musarurwa
12 Jan, 2009
New York City

Australia job placements ads drop 9.7% in December. Job placement ads in the metropolitan cities declined sharply as businesses scale back hiring. Rio Tinto shelves $2.15 billion plan to explain iron ore mining in Brazil. Stocks in Sydney trading fell with the benchmark index ASX 200 declining 1.4%.

[R]3:00AM New York, 7:00PM Sydney - Australian job placements ads drop 9.7% in December. Rio Tinto shelves $2.5 billion plan to explan iron ore mining in Brazil.[/R]

Australia stocks fell 1.4% as a report indicated that the country’s job advertisements intensified in December showing that demand for new labor has plummeted to recessionary levels.

Commodity stocks declined as crude oil prices dropped and Rio Tinto postponed its iron ore expansion project in Brazil.

In Sydney trading ASX 200 index fell 1.4% or 52.4 to 3,683.30.

Of the ASX 200 index stocks, 51 rose, 136 declined, and 13 were unchanged. HFA Holdings led gainers in the index shares with a rise of 29.2%.

Job Ads Drop 9.7% in December

Australia & New Zealand Banking Group reported today that the total number of jobs advertised in major metropolitan newspapers and on the internet declined 9.7% to an average of 190,661 per week from 8.6% the previous month.

Job adverts were also 29.9% down from a year earlier.

The number of job advertisements in major metropolitan newspapers fell 13.9% in December to an average 10,126 per week after dropping 12% in November. The placements plunged 51.8% from the comparable period a year ago.

Large declines in newspaper job advertisements in November were dragged by a fall in Western Australia by 22.8%, in Victoria 18.2%, in South Australia 17.2%, in Queensland 10.5%, in New South Wales 10.1% and in Tasmania 4.3%.

Northern Territory was the only state to rise with an increase of 7.5% in December from a decline of 17.4% in November.

In addition, internet job advertisements dropped 9.5% in December and 28.1% from a year ago.

ANZ Head of Australian Economics Warren Hogan said, “The rate of decline in job advertising intensified in the month of December, providing further evidence that the demand for new labour across the Australian economy is now at recession levels.”

ANZ forecasts that the unemployment rate will rise 6% in 2009 from the present 4.4%, while total employment is expected to fall 21,000.

Gainers & Losers

HFA Holdings led gainers in the ASX 200 index shares with a rise of 29.2% followed by increases in Valad Property of 15.4%, in Energy World Corp. of 7.3%, in FKP Property Group of 5.7%, and Transpacific Industries of 5.7%.

Sunland Corp. led decliners in the ASX 200 index shares with a fall of 20% followed by losses in Babcock & Brown of 11.5%, in NRW Holdings of 9.8%, in Nexus Energy of 9.7%, and Acquarius Platinum of 7.7%.

Commodity stocks fell after crude for February delivery fell 1.7% to $40.15 a barrel. Linc Energy plummeted 6.2% and Sino Gold shed 6.4%.

Rio Shelves Expansion Project in Brazil

Rio Tinto today said it is postponing its US$2.15 billion expansion of Corumba iron ore mine in Brazil mine in Brazil as economic conditions continue to worsen on the global financial markets.

The planned expansion project was meant to increase annual capacity at the iron ore mine to 12.8 million tons a year from the present 2 million tons.

“In response to the severe market downturn resulting from the current global financial crisis, the expansion of the Corumba mine and associated logistics have been postponed.” said Rio Tinto in a statement.

The stock closed down 6%.