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Market Update

Australian Indexes Defy World Markets Caution

Author: Marcus Jacob
Last Update: 9:43 AM ET October 16 2013

4:30 PM Sydney – Australian markets traded higher and markets in Asia gained in thin volume. Australian dollar closed at 95.22 U.S. cents as investors look for alternative to the U.S. dollar.

Australian market indexes closed higher after a choppy trading session as world markets awaited the resolution to the political stalemate in the U.S.

Tea Party extremists dominated Republican party controlled U.S. House led government shutdown entered in the sixteenth day. Tea party lawmakers prefer to be reckless with the U.S. creditworthiness that may send economic shockwaves around the world.

U.S. is may default on its debt obligation for the first time in 224 years if lawmakers fail to agree on increasing government debt ceiling by tomorrow.

Late evening on Tuesday, Fitch Ratings issued a note and placed the U.S. debt on a watch list with a negative bias and highlighted risks associated with the delay in debt ceiling revision and prolonged government shutdown.

Australian dollar dropped to 95.22 U.S. cents and in stock trading turnover rose to 680 million shares worth $4 billion.

The ASX 200 index rose 3.80 to close at 5,262.90 and the broader All Ordinaries closed up at 5.20 to 5,264.40.

Stocks in Review

Rio Tinto gained 91 cents to $64.11 after the Aluminium Corporation of China valued its stake in Rio Tinto’s Guinean iron ore project at $2.07 billion.

BHP rose 38 cents to $35.78.

Woodside Petroleum Limited added 2 cents to $38.52 after the Australian-based fabricator and construction services provider AusGroup Limited’s subsidiary AGC Industries Pty Ltd signed a multi-discipline services agreement with Woodside Petroleum for maintenance work at Domestic Gas Plant at Western Australia.

Westpac fell 3 cents to $33.21.

Brambles Limited increased 0.9% to $9.38 after the pallet maker said revenue in the first-quarter ending in September jumped 7% to US$1.31 billion from a year ago and the company lifted its earnings guidance for the fiscal 2014.

CSL Limited gained 1.3% to $66.26 after the biopharmaceutical company plans to buy back its own shares worth $950 million and reiterated its guidance for 10% increase of net profit for fiscal 2014.

Iluka Resources Limited declined 4.4% to $10 after the mineral-sands producer said revenue the first nine months plunged 40% to $528.7 million in response to lower demand and total mineral sands production in the third-quarter dropped to 276,500 tons compared to 397,500 tons a year ago period.

Mount Gibson Iron Limited soared 6.5% to 82 cents after the iron ore miner said total ore sales in the third quarter ending in September climbed 47% to 2.6 million wet metric tons from 1.8 million wet metric tons.

The company reaffirmed iron ore sales for the year between 9 million tons and 9.5 million tons.

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