BHP's iron ore record gives stocks a boost
THE sharemarket lifted yesterday after BHP Billiton said it had enjoyed record levels of iron ore production in the past three months.
THE sharemarket lifted yesterday after BHP Billiton said it had enjoyed record levels of iron ore production in the past three months.The news countered falls in financial stocks, which retreated in the face of World Bank warnings of a second global financial crisis.The benchmark S&P/ASX 200 Index rose 2.3 points to 4217.9, while the broader All Ordinaries gained 2.9 points to 4280.6.BHP Billiton, the world's largest mining company, released a report showing second-quarter iron ore production had risen a record 22 per cent, driven by mine, rail and port expansions in Western Australia.Shareholders welcomed the news, pushing BHP shares 30? higher to $37, while rival Rio Tinto benefited from the positive sentiment, gaining 90? to $66.60."Resource stocks have been a talking point in Australia after BHP Billiton posted its quarterly production report," IG Markets strategist Stan Shamu said."The report was well received, and it largely beat estimates, with solid numbers in the three key businesses of iron ore, petroleum and base metals," he said. In the morning, the sharemarket slipped 2 per cent after investors locked in gains from the previous day, when shares had finished 68.4 points higher, up 1.65 per cent.The falls were compounded by warnings from the World Bank that the global economy was on the verge of a second financial crisis. This pushed financial stocks lower.ANZ suffered the largest fall, closing 26? lower on $20.79, while National Australia Bank dropped 14? to $23.66, and Westpac slipped 9? to $23.57.But despite the falls, there was enough momentum to push the market into positive territory, with industrial, materials and energy stocks doing some heavy lifting.Newcrest Mining rose 36? to $32.77. Energy stocks also gained, with Woodside Petroleum rising 46? to $34.11, and Orica Energy gaining 61? to $25.37.Meanwhile, Tokyo Electric Power said it would raise electricity rates for companies and other large users, potentially increasing annual revenue by Y400 billion to cover higher fuel costs after the Fukushima nuclear crisis caused by last year's earthquake and tsunami.The Australian dollar was steady against the greenback after earlier reaching an 11-week high on the back of stronger than expected Chinese growth data.At 5pm, the local unit was trading at $US1.0390, compared with $US1.0389 the previous day.