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Australian Market Wrap
Australian Equities rallied after the Dow Jones Industrial Average closed at its highest level since May 2008 after the US unemployment rate unexpectedly declined to 8.3 percent. Volumes were heavier locally as investors finally breathed a sigh of relief, albeit there was some consolidation after domestic retail sales declined in December, missing expectations for growth.
Materials led the charge as Metals & Miners – BHP Billiton (A$38.21, +1.6%), Fortescue Metals (A$5.36, +5.7%), Iluka Resources (A$18.15, +4.9%), Rio Tinto (A$72.30, +2.6%) – jumped. Orica (A$24.85, +2.5%) said it will resume the restart of its Kooragang Island ammonia plant tomorrow after repairing one of the facility’s compressors. Bathurst Resources (A$0.775, +9.2%) surged as large multiple lines of stock changed hands.
Iron Ore names rallied, led by Gindalbie Metals (A$0.685,+7.0%) and Fortescue Metals (A$5.36, +5.7%). Separately the former awarded a A$570 million services contract for its Karara Iron Ore Project to Downer EDI (A$3.79, +7.1%). Downer also benefited from a A$175 million government bailout of Reliance Rail. Panaust (A$3.73, +4.2%) announced that drilling increased mineralization at its Laotian projects. Meanwhile Beach Energy (A$1.595, +2.6%) discovered a new oil field at the Cooper Basin.
Financials followed, led by National Australia Bank (A$24.17,+1.8%) with the other Major Banks – ANZ (A$21.33, +1.0%), Commonwealth Bank (A$50.84, +0.5%), Westpac (A$21.03,+1.2%) – also climbing. Cardno (A$6.15, +2.7%) announced the acquisition of environmental services firm, ATC Associates, for US$106 million. IMF (Australia) (A$1.36, +3.8%) said it will investigate whether the operator of Brisbane’s Wivenhoe Dam made the Queensland floods worse. Macquarie (A$26.10, +4.4%) tracked overseas banks higher.
Perpetual (A$21.01, +3.8%) announced that Chief Executive Chris Ryan agreed to step down following a disagreement with the board, to be replaced by Geoff Lloyd. Finally Spotless (A$2.50, +2.9%) rose after it granted due diligence to Pacific Equity Partners, the company stated that it wants to “minimise disruption” despite PEP’s inability to meet its A$2.80 asking price.