BHP announcement leads resources higher
Sydney Morning Herald
Wednesday March 31, 2010
THE Australian market finished almost 20 points up yesterday after a solid day by the resource sector. The benchmark S&P/ASX 200 index added 19.5 points, or 0.4 per cent, to 4916.8 points, while the broader All Ordinaries index gained 19.6 points,or 0.4 per cent, to 4926.8 points. BHP Billiton€™s announcement that it had reached an agreement with some of its Asian iron ore customers to move away from annual pricing helped it gain $1.03 to $44.41.€˜€˜Moving away from that pricing regime is seen as a positive because the spot price of iron ore is far above the contract price from last year,€™€™ Mark Goulopoulos, an associate at broker Patersons, said.Rio Tinto was pulled up on the BHP news because Rio has more leverage than BHP does. This overshadowed any concerns from the fallout of the Stern Hu verdict.Generally, the market had another day of €˜€˜sleepy€™€™ volumes as Easter approached, Mr Goulopoulos said.€˜€˜Telstra had another poor day back to the $3 level [down 4 to $3.02] but generally speaking it was all about resources. Even in the midcaps, we saw Fortescue had a very good day and some of the coal companies were very strong, but it was all about iron ore.€™€™Fortescue was up 14 to $4.96 and Rio Tinto gained 86 to $79.25.Industrials were up 0.8 per cent while telecoms lost 1.21 per cent on the back of Telstra€™s slide.Periods of low volatility usually precede a large movement up or down. €˜€˜The longer this goes on it is like a spring gathering tension €“ at some point it is going to explodeone way or another, €™€™ Mr Goulopoulos said.On the currency front, the Australian dollar was up marginally against the greenback at US91, the pound at 61 pence and the euro at A0.68.Gold prices hit a one-week high because the metal was in demand following a slump in the US dollar.The spot price of gold in Sydney was $US1112.31 an ounce, which was up $US4.36The Australian Competition and Consumer Commission said it had deferred a decision on AMP€™s $12.8 billion takeover bid for AXA Asia-Pacific Holdings to April 22.AMP rose 7 to $6.38.Rival bidder National Australia Bank was in a trading halt and last traded at $27.70, while AXA was also in a halt pending the announcement, last trading at $6.35.
© 2010 Sydney Morning Herald
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