The Australian sharemarket soared to dizzy heights again today, with the usual suspects from the commodities sector, Rio Tinto and BHP, helping the bourse to smash records.
Australia's main stock index fell from a record. Macquarie Bank Ltd. declined on speculation earnings may fall after UBS AG said it had a loss in the third quarter because it wrote down the value of its fixed-income securities.
Newcrest Mining Ltd. and Lihir Gold Ltd. advanced as gold prices increased and Credit Suisse Group said the mining companies are attractive takeover targets. Innamincka Petroleum Ltd. jumped as much as 405 percent to a record after discovering what it said may be one of the largest onshore oilfields in Australia.
Sharemarket on track for 7000 point Christmas
``Gold has been extending its gains pretty well as a nice alternative investment as the U.S. dollar weakens,'' said Albert Landman, who helps manage the equivalent of $71 million at Tricom Equities Ltd. in Melbourne. ``And takeover rumors do tend to get people excited.''
The S&P/ASX fell late in the session, losing 4.10 points to 6,563.70 in Melbourne, after closing at records on four days last week. The measure reached an all-time high of 6,605.00 today. Almost the same number of stocks fell as rose.
Today is a public holiday in the states of New South Wales, South Australia, Western Australia and the Australian Capital Territory.
Rio Tinto Group gained on speculation copper supplies may be interrupted by a strike, boosting prices of the metal. BHP Billiton Ltd. rose to a new high before ending the day lower.
Macquarie, Australia's largest investment bank, declined 1.2, or 1.4 percent, to A$83.20 on speculation more losses stemming from a housing slump in the U.S. may emerge. Macquarie shares fell 11 percent in August when two of the bank's funds were hit by the turmoil in credit markets, triggered by the worst U.S. housing slump in at least 16 years.
UBS, Europe's biggest bank, said its pretax loss amounted to between 600 million francs and 800 million francs ($687 million). The bank shut its Dillon Read Capital Management hedge fund in May after bonds back by subprime, or higher risk, mortgages soured.
Australia and New Zealand Banking Group Ltd., Australia's third-biggest lender, lost 9 cents, or 0.3 percent, to A$29.61. Rams Home Loans Group Ltd., a Sydney-based lender that failed to refinance A$6.18 billion of short-term debt in the U.S. in August, fell 2.5 cents, or 2.9 percent, to 85 cents.
Newcrest, Australia's biggest gold producer, added A$1.10, or 3.9 percent, to A$29.10. Lihir, its second-largest, jumped 18 cents, or 4.6 percent, to A$4.12, a record.
Newmont Mining Corp., the world's No. 2 gold producer, said during a presentation at the Denver Gold Forum Sept. 26 that both companies were attractive because of low production costs, according to a Sept. 28 note by analysts at Credit Suisse led by Michael Slifirski. Newmont may seek such producers as its own output of the metal becomes more expensive, the note said.
Gold rose in Asia to a more than 27-year high, as the dollar's decline to a record low against the euro sparked demand from investors seeking an alternative investment.
Gold for immediate delivery gained as much as $2.29, or 0.3 percent, to $745.89 an ounce, after rising to $745.84 on Sept. 28, the highest since January 1980. The precious metal recently traded at $745.54 an ounce. The contract for December delivery strengthened 60 cents, or 0.1 percent to $750.60 an ounce in after-hours trading in New York.
Innamincka, a Brisbane-based oil and gas explorer company, soared A$1.105, or 283 percent, to A$1.495, the biggest gain since the stock began trading in Nov. 2003, after earlier climbing as high as A$1.97.
The company said two previously discovered wells were now believed to be connected, suggesting a substantial increase in the oil resource.
Rio Tinto, the world's third-biggest mining company, gained 62 cents, or 0.6 percent, to A$108.84. BHP, the biggest, slipped 5 cents, or 0.1 percent, to A$44.50, after earlier rising as high as A$45.10.
Copper rose in Asia on concern supplies may be disrupted by a strike at Peru's Southern Copper Corp., the world's fifth- largest producer of the metal. Copper for delivery in December added 0.3 percent on the London Metal Exchange on Sept. 28. The workers will strike tomorrow for higher wages.
The S&P/ASX 200's futures contract for December added 0.3 percent to 6,628. The broader All Ordinaries Index decreased 1.1 points to 6,579.80.
The following shares also gained or declined. Stock symbols are in brackets after the company names.
Goodman Fielder Ltd. (GFF AU), Australia's largest baker, lost 8 cents, or 3.1 percent, to A$2.50. Larry Gandler, an analyst at Credit Suisse, cut the rating on the stock to ``underperform'' from ``neutral'' and set a 12-month share-price estimate of A$2.46.
Gunns Ltd. (GNS AU), a timber processor and exporter, rose 3 cents, or 1.1 percent, to A$2.82. Australia's Environment Minister Malcolm Turnbull will make a decision this week on the fate of a A$2 billion ($1.78 billion) Gunns pulp mill in Tasmania state. The mill is opposed by environmentalists and high-profile people such as actress Cate Blanchett.
Sino Gold Mining Ltd. (SGX AU), the owner of China's second-largest gold mine, gained 44 cents, or 5.9 percent, to A$7.96. The company's recently purchased subsidiary Golden China Resources Corp. made $31 million in the year to June 30.