5:00 PM Sydney, Australia – Australian stocks extended weekly losses as iron ore prices hit five-year low and thermal coal drops to a four-year low. Sustained decline in Chinese property market is causing several traders to liquidate inventories in Shanghai. Several smaller Australian mining companies are struggling to contain costs.
Australian markets extended weekly losses as resource price continue to drift lower and iron ore dropped to a five-year low.
The decline in Chinese property market is gathering momentum and the resource prices of all many minerals and thermal coal are now at a multi-year low.
Iron ore dropped to $84.30 a ton, a five-year low and thermal coal is trading at $70 a ton, a four-year low price.
Prices are expected to decline more in the year final quarter of the year as China cracks down on home financing and forces companies to clean up balance sheet leverage.
Smaller mining companies are struggling to contain cost and deal with falling prices and Fortescue Metals Group Limited, the third largest resource company in Australia, has lost nearly one third of its market cap.
BC Iron plunged 20% in the week, Mount Gibson declined 8% and Fortescue Metals lost 6%. BHP Billiton and Rio Tinto declined 2% in the week.
Australian dollar closed at 93.45 U.S. cents and in stock trading turnover fell to 607 million shares worth $3.66 billion.
ASX 200 index slipped 32.60 or 0.6% to 5,598.70 and the broader All Ordinaries index fell 33.20 to 5,598.90. For the week, ASX 200 slid 0.5%.
Stocks in Review
Amcom Telecommunications Limited
rose 0.5% to $2.01 after the communication company said total revenue in the year ending in June climbed 8% to $170.4 million from $157.7 million a year ago period.
Net income in the year soared 7.7% to $22.4 million compared to $20.8 million a year earlier.
Amcom did not provide earnings per share data.
declined 6.7% to 21 cents after the financial and real estate service provider sold its 50% stake in logistics firm AWH Pty Ltd to DP World Australia for $30 million and 50% of AWH''s net cash.
G8 Education Ltd
climbed 2.9% to $5.58 after the child care and educational services provider agreed to acquire 14 childcare and education centers.
Kingsgate Consolidated Limited
plunged 5.2% to 81.5 cents after the gold mining and explorer reported net sales in the year nearly flat at $328.3 million from $329.3 million a year ago period.
Net loss in the year narrowed to $122.7 million compared to $286.05 million and diluted loss per share declined to 55.9 cents from 215 cents a year earlier.