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Market Update

Australia Extends Six-Day Rally, Aurizon Lowers Profit Outlook

Author: Marcus Jacob
Last Update: 7:04 AM ET December 23 2015

4:30 PM Sydney – Australian markets extended gains for the sixth day in a row on the strength in banking and mining stocks. Aurizon Holdings issued a profit warning. Mirvac Group signed an agreement with China Investment Corp. Slater & Gordon Limited faces another class action suit.

The Australian stock market managed to stay in positive territory for a sixth consecutive day, although gains were marginal.

Among the most heavily traded stocks, Commonwealth Bank of Australia gained 0.5%, Westpac Banking Corporation rose 0.2%, and the resource leader BHP Billiton Limited soared 3.5%.

The Australian dollar edged up to 72.37 U.S. cents, while stock trading turnover declined to 618 million shares worth $3.6 billion.

At the market close, the ASX 200 Index gained 25.10, or 0.5%, to 5,141.80 and the broader All Ordinaries Index added 25.80 to 5,193.50.

In commodities trading, gold slid US$3 to US$1,074 an ounce and Brent crude future for immediate month delivery rose 30 cents to US$36.41 a barrel.

Australian Stock Movers

Aurizon Holdings Ltd plunged 11.7% to $4.36 after the company issued a profit warning linked to the non-cash impairment charges in Aquila, Galilee Basin brown field in the range $215 million and $240 million.

The railway operator forecasted operating profit in the first-half of fiscal 2016 in the range of $390 million to $410 million, compared to consensus estimates of $510 million.

Coal haulage volumes are estimated between 3% and 4% lower than expected for the first half of the current fiscal year, while estimates for iron ore freight volumes remains unchanged.

The company also suspended its operation of the $6 billion West Pilbara iron ore project.

Mirvac Group closed unchanged at $2.01 after the real estate developer signed an agreement for $34.7 million with a subsidiary of China Investment Corporation to become the asset manager of Investa Property Trust.

Mirvac will also invest $25 million in the CIC controlled trusts.

The company’s office assets under management are now valued at $8 billion.

Slater & Gordon Limited declined 6.6% to 91.5 cents after it became clear that the law firm faces another class action legal action for its performance and stock price loss.

Rival firm Maurice Blackburn Lawyers is opening registration to shareholders who want to pursue a class action against Slater & Gordon for misleading investors over its 2016 profit forecast and for its capital plan that raised $890 million to acquire Quindell’s UK business.

The company has already lost almost 90% of its $2.75 billion market value on the Australian stock exchange since April after the acquisition of Quindell for $1.3 billion.

Slater & Gordon is investigated by the Australian Securities and Investments Commission for errors in financial statements.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc