Australian Stocks Indiacte Lower Opening

123jump.com Staff
21 Sep, 2009
New York City

Australian stocks indicate lower opening with the decline in crude oil and gold prices in New York. Rio Tinto sells Brazil iron ore assets. New Zealand consumer optimism climbs in September. The Australian dollar hovered near its 13-month high.

[R]8:00 AM Sydney, 7:00 PM New York - Rio Tinto sells Brazil iron ore assets. New Zealand consumer optimism climbs in September.[/R]

The Australian stocks are expected to decline after the fall in crude oil prices and gold prices in New York and London trading.

In yesterday’s trading, Australian benchmark fell marginally 0.3% on caution ahead of the meeting of the U.S. Federal Reserve between September 22 and September 23 to decide interest rate and continuation of various lending programs. Investors expect rates to remain at the current target range between zero and 0.25% and most direct lending programs to continue.

Commodity stocks dropped as well. Gold prices declined 0.3% to $1,010 per ounce and oil prices shed 0.6% to $72 per barrel.

In Sydney trading ASX 200 index shares dropped 0.3% or 15.8 to 4,677.40. Of the ASX 200 index stocks, 82 rose, 105 dropped, and 13 were unchanged. Gunns Ltd. led advancers in the index shares with a rise of 5.7% followed by Macquarie Infrastructure jumping 5.6%.

Rio Sells Brazil Iron Ore Operations

Rio Tinto reported today that it has completed the sale of its Corumba iron ore mine in Brazil to Vale S.A. for $750 million in cash and with that the miner has raised $6.6 billion through asset sale.

Separately, Rio Tinto Alcan chief financial officer Phillip Strachan announced in a presentation it intends to slash capital spending by 15% next year to $500 million.

Rio expects long-term demand for aluminum to grow between 4% and 6% through economic cycles.

Although aluminum prices have been rising on a depreciating U.S. dollar, increased China imports and optimism about the recovery of the global economy, recovery signs for end users of aluminum have been mixed.

New Zealand Consumer Optimism Rises in Sept

Roy Morgan Research reported on its website today the proportion of respondents who expect the economy will improve over the next year advanced to 47% in early September from 40% a month ago. Pessimists dropped to 28%.

Also 56% of consumers expect to be better off in a year compared with 55% in August, while the proportion of people saying it’s a good time to buy a major household item advanced 45%.

BHP Buy Back Likely

Citigroup reported on Friday BHP Billiton may buy back $17 billion of its own shares if global economic conditions improve. The analysts note that buying back 10% of its shares will increase earnings per share by 10% in the year ending June 30, 2011.

Aussie Falls 0.5%

The Australian dollar declined 0.5% to 86.34 US cents against the dollar.

Gainers & Losers

Commodity stocks fell after gold prices slipped 0.3% to $1010 per ounce and crude oil prices plunged 0.6% to $72 per barrel. Dominion Mining dipped 3.6% and Lihir Gold tumbled 3.6%.

ASX Movers

Independence Group NL led the decliners in the S&P ASX 200 index with a loss of 5.0% followed by losses in Lion Nathan Limited of 4.2%, in Carnarvon Petroleum Limited of 4.1%, in Austar United Communications Limited of 4.0% and in GrainCorp Limited of 3.7%.

Gunns Limited led gainers in the S&P ASX 200 index with a rise of 5.6% followed by gains in Macquarie Infrastructure Group 5.5%, in Macmahon Holdings Limited of 5.0% and in PaperlinX Limited of 4.7%.

Other Movers

Fairfax Media Limited the media company fell 2.9% to A$1.66.

Gunns Limited increased 5.6% to A$1.21 after the company submitted a conditional proposal to the liquidator of Timbercorp Limited to acquire certain forestry assets.

Harvey Norman Holdings Limited decreased 1.6% to A$4.24.

Murchison Metals Limited decreased 2.0% to A$1.71 and the iron ore miner said full-year revenues fell 17.6% to $6.1 million from $7.4 million a year ago. Net profit for the full-year fell 98.7% to $732,000 or 17 cents per diluted share compared to net profit of $55.6 million or 13.59 cents per share a year ago.

National Australia Bank Limited dropped 1% to A$29.54 and Westpac Banking Corporation fell 0.1% to A$24.88.

Qantas Airways Limited closed unchanged at A$2.78 and the Australian airline company said full-year revenues fell 6.4% to A$14.6 billion from A$15.6 billion a year ago. Net profit for the full-year fell 87% to A$123 million or 5.6 cents per diluted share compared to net profit of A$970 million or 49 .0 cents per share a year ago.

Rio Tinto Limited declined 0.5% to A$60.69 after the metal and mineral production said it closed the sale of its Corumba iron-ore mine in Brazil and associated assets to Vale SA.