4:30 PM Sydney – Australian indexes closed flat after cautious statement from the central bank held out optimism for a rate cut in the future. Rio Tinto said second quarter iron ore production increased 7% and it is on track to cut exploration spending by $750 million.
Australian stocks closed nearly unchanged and investors digested the latest increase in production report from Rio Tinto and comments from the central bank suggested another rate cut may be likely but not for now.
The ASX 200 index edged up 4.90 to close at 4,986 and the broader All Ordinaries inched up 3 to 4,968.60.
Australian dollar traded higher at 91.91 U.S. cents and in stock trading turnover declined to 624 million shares worth $3.1 billion.
Reserve Bank of Australia said in its minutes of meeting released today that outlook for Australian mining sector is uncertain but high amount of committed contract work is likely to sustain growth in the short term.
The policy setting committee also noted the sharp decline in exchange rate and highlighted the large monetary stimulus in place for now and the current state of policy is “appropriate for now.”
Rio Tinto said it increased its iron ore production in second quarter by 7% and added it is on track to lower its exploration spending by $750 million in the current year.
Stocks in Review
Rio Tinto jumped 75 cents to $55.52 after the mining company reaffirmed its full-year guidance after its second quarter iron ore production climbed 7% to 51.82 million tons and expects 265 million tons for the year.
BHP rose 50 cents to $33.43. Woodside Petroleum Limited slid 14 cents to $37.41.
David Jones Limited down 2 cents to $2.48 and Breville Group fell 2 cents to $7.43. Woolworths decreased 9 cents to $33.68.
Mirvac Group closed unchanged at $1.64. Lend Lease declined 22 cents to $8.94.
Westpac jumped 31 cents to $29.67 after the bank reduced the operating overheads of $30 million, followed the earnings downgrade in May.
Commonwealth climbed 0.7% to $71.75 and National Australia Bank added 0.2% to $30.10. ANZ up 20 cents to $29.15.
AngloGold Ashanti Limited closed unchanged at $2.71 after the gold miner reported it second quarter production was 935,000 ounces at a total cash cost of between $994 and $1,016 per ounce. The gold miner lowered its full-year guidance to a range between 4 million and 4.1 million ounces and second-quarter earnings will be lower than expected.
Orica Limited declined 2.1% to $21 after the energy company signed a supply contract with Australian independent oil and gas company Strike Energy Ltd.
Charter Hall Group closed unchanged at $3.93 after the property investor sold its head office in Melbourne for $48 million to a private investor.
NRW Holdings Limited closed unchanged at $1 after the civil and mining contractor awarded contract worth $31 million from BHP Billiton at its Mooka Ore car repair shop site.
Sims Metal Management Limited fell 0.3% to $8.97 after the iron and steel recycler sold its stake in a former subsidiary of its North American metals business with a loss. From a transaction, the company expects to incur a loss before-tax of $9 million.