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Market Update

Australian Indexes at a New 5-Year High, Miners in Focus

Author: Marcus Jacob
Last Update: 9:41 AM ET March 05 2014

5:00 PM Sydney – Australian market indexes closed at a new five-and-a-half year high after December quarter growth was ahead of expectations and hopes of tensions easing in Ukraine. Iron ore miners were in focus on the expectations of a revival in merger deals.

Australian stocks opened sharply higher and stayed near the high of the session and closed at a five-and-a-half year high.

Market sentiment was positive after tensions eased between Russia and Ukraine. U.S. offered a $1 billion loan guarantee, far less than the $15 billion emergency funding requested by the Ukraine’s interim and unelected government.

U.S. and European Union member nations have a history of offering economic assistance that are not always followed up with what is announced.

Market sentiment was also buoyant after December quarter economic growth was 0.8%, Australian Bureau of Statistics reported today. The growth data was higher than estimated by economists.

Australian dollar gained to 89.63 U.S. cents and stock market trading turnover jumped to 960 million shares worth $5.7 billion.

The ASX 200 index increased 46 to 5,446.20 and the broader All Ordinaries rose 45.60 to 5,457.30.

Stocks in Review

BHP jumped 44 cents to $37.80 and Rio Tinto rose 18 cents to $64.81 despite the iron ore spot price in China declined 0.8% to a nine-month low of US$116.80.

The large mining companies traded higher after Glencore Xstrata suggested new deal making focus reviving hopes of positive outlook for the industry.

BHP will trade ex-dividend from tomorrow and a cash dividend of $1.18 per share is scheduled to be paid to shareholder on register today on March 26.

Woodside Petroleum Limited added 21 cents to $38.37.

Westpac climbed 58 cents to $34.23.

Carsales.com Limited rose 0.8% to $10.51 after the online used and new car sales portal agreed to acquire additional 3% stake worth $7.2 million in iCar Asia to lift the total holding in the ASEAN online car network to 22.9%.

Downer EDI Limited slid 0.6% to $4.93 after the engineering contractor secured $70 million contract at the TAN Burrup project in Western Australia.

Wesfarmers Limited gained 1% to $43.15 after the specialty retailer said its supermarket chain Coles plans to invest $1.1 billion in the next three years to build 70 new supermarkets and to create 16,000 jobs.

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