Weak Opening in Sydney, GrainCorp Up

123jump.com Staff
13 May, 2009
New York City

Stocks in Australia to open lower on weak U.S. retail sales. GrainCorp Ltd lifted its annual earnings outlook on higher export tonnage for commodities. In the previous session, stocks traded sideways as commodities prices edged lower and speculators focused on BHP Billiton and Rio Tinto.

[R]7:00 AM Sydney, Australia – Australian stocks traded sideways after weak outlook for commodities and ongoing media speculation that the deal between Rio Tinto and Chalco may be scrapped. GrainCorp Ltd lifted its annual earnings outlook on higher export tonnage for commodities.[/R]

Stocks in Australia edged lower as investors looked for direction in global markets. The recent run up in commodities and oil prices are coming into a sharp focus as more investors bet that the prices of metals will fall before they climb higher.

ASX 200 index in Australia decreased 21.10 or 0.54% closed to 3,856.10. Australian dollar weakened against the U.S. dollar and traded near 75.51 U.S. cents.

Gainers & Losers

Rio Tinto Group plunged 4.7% to A$65.25 after media speculation in UK suggested that the deal between the mining company and Aluminum Corp of China may be on hold. The Australian regulators have not been enthusiastic with the proposed deal with China controlled company.

Santos Ltd surged 8.3% to A$14.46 after it completed its offering to raise A$1.75 billion to develop natural gas project in Papua New Guinea to be operated by Exxon Mobil.

Lend Lease Corp declined 2.4% to A$7.05 after the stock was downgraded at Royal Bank of Scotland. Separately UK government will spend additional 1 billion pounds to build Olympic village that will house as many as 15,000 athletes for 2012 Olympics. Lend Lease is contractor to build the 3,000 apartment that will be sold after the games are over and proceeds will go to the UK government.

GrainCorp Limited increased 5.1% to A$7.20 after it lifted its annual earnings outlook to between A$32 million and A$42 million from its previous estimate of between A$23 million and A$28 million. The terminal operator expects to handle 4 million tons of grains for the year.

ASX 200 Index Movers

Babcock & Brown Japan Property Trust Fund led the decliners in the ASX 200 index of 14.2% followed by losses in Macquarie Office Trust of 10.5%, in AJ Lucas Group Limited of 10.3%, in Santos Limited of 8.2% and in Commonwealth Property Office of 7.4%.

Pacific Brands Limited led gainers in the ASX 200 index with a rise of 21.9% followed by gains in Platinum Australia Limited of 14.0%, in PanAust Limited of 8.3% and Boart Longyear Group of 7.1%.