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Market Update

Australian Indexes Plunge 4%; Weak Results from Caltex and Fortescue


Author: Marcus Jacob
ticker.com
Last Update: 1:09 PM ET August 24 2015

5:30 PM Sydney, Australia Australian market indexes plunged 4% following a global market sell off. Crude oil fell more than 2% after another day of sharp decline in Shanghai and Hong Kong. Caltex, Fortescue and Lend Lease reported weakening quarterly results. Blue Scope Steel swung to quarterly profit.

Australian market indexes plunged more than 4% after markets in Europe and New York deepened losses on Friday.

In addition, market indexes plunged in Shanghai, Hong Kong and in Tokyo at the opening and crude oil price dropped to a new low in the year.

Investors have turned cautious and stayed away from riskier assets like stocks on the faster than expected economic slowdown in China, stretched valuations in developed markets in the U.S. and Europe and more than 25% correction in iron ore, copper and crude price in 2015.

Australian dollar closed at 72.25 U.S. cents and in stock trading turnover soared to 1.28 billion shares worth $8.2 billion.

At close, the ASX 200 Index declined 213.30 or 4.1% to 5,001.30 and the broader All Ordinaries Index slumped 210.60 or 4.2% to 5,014.20.

In commodities trading, gold slipped US$7 to US$1,155 an ounce and Brent crude dropped $1.19 to close at US$44.27 a barrel.

Australian Stock Movers

BlueScope Steel Limited surged 8.6% to $3.67 after the steel products maker said revenues in the year ending in June jumped 7% to $8.57 billion from $8.01 billion a year ago period.

Net in the quarter swung to profit of $136.3 million compared to a loss of $82.4 million and diluted earnings per share swung to a 24.3 cents from diluted loss per share of 14.8 cents in the same period a year ago.

Caltex Australia Limited declined 6.9% to $29.72 after the petrol refiner and retailer stated revenues in the year ending in June plunged 24% to $9.74 billion from $12.77 billion a year ago period.

Net income in the quarter more than double to $375.6 million compared to $164.8 million and diluted earnings per share soared to 138.7 cents from 60.2 cents in the same period a year ago.

Fortescue Metals Group Limited tumbled 14.6% to $1.63 after the iron ore producer reported revenues in the year ending in June plummeted 27% to $8.57 billion from $11.75 billion a year ago period.

Net income in the quarter plunged 88% to $317 million compared to $2.82 billion and diluted earnings per share declined to 10.16 cents from 87.85 cents in the same period a year ago.

The company blamed profit decline to iron ore price fall from US$52 a ton to US$38 a ton and in the year.

The iron ore miner said total debt on the balance sheet is about US$9.5 billion and cash flow by the end of the year is expected to be US$2.04 billion.

Lend Lease Group slumped 4.1% to $13.72 after the property and infrastructure developer reported revenues in the year ending in June slumped 4.7% to $13.28 billion from $13.94 billion a year ago period.

Net income in the quarter tumbled 24.8% to $618.6 million compared to $822.9 million and diluted earnings per share declined to 91.5 cents from 130.3 cents in the same period a year ago.

South32 Ltd plunged 7.6% to $1.40 after the spin-off from BHP Billiton, metals and mining company said revenues in the year ending in June soared 308% to US$3.48 billion from US$853 million a year ago period.

Net in the quarter swung to a loss of US$919 million compared to a profit of US$46 million and diluted loss per share swung to 26.7 cents from diluted earnings per share of 1.4 cents in the same period a year ago.

The company plans to reduce costs by US$350 million per year by the end of 2018 and also plans to reduce capital expenditure to US$650 million, 9% decline by the end of 2016.

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