Australian Stock Market Trading In Negative Territory, Led By AGL Energy On Downward Revision Of Earnings Forecast; Oil Stocks Gains
The stock market in Sydney, Australia is trading in the negative territory on Monday morning, led by energy-related stocks such as AGL Energy on concerns that shrinking retail energy margins might negatively impact the overall bottom line of these firms. The drop in indices is partially arrested by oil related stocks such as BHP Billiton and Woodside Petroleum following firming up of the crude oil prices in the international market The All Ordinaries Index is presently trading at 6,751.80, down 8.30 points, or 0.12%, while the broader S&P/ASX 200 Index is trading at 6,739.20, down 9.70 points, or 0.14%. The Australian Dollar is presently quoted at US$0.9040, compared to previous closing in the range of US$0.8971/75 on Friday evening in Sydney. Energy related stocks led the decline in the market, which had opened in the positive territory in the morning session led by oil related stocks. AGL Energy, the largest power retailer in the country, had revised the earnings forecast for the year 2008 from its earlier forecast range between A$380 million to A$400 million to the revised range between A$330 million and A$360 million. The company, while revising the figures downward, had stated that the recent strengthening of the local currency against the US dollar, and shrinking margins in retail energy trade were the primary reasons for its downward revision. The company further noted that it would revisit its earlier projections of earnings for the future years, taken into consideration the latest developments in the foreign exchange front, and, if required, might revise the projections of future years. Following the statement from the company, the share price of AGL Energy in the market declined sharply and dragged down the overall market indices into the negative territory. The share price of AGL is presently quoted at A$12.95, down A$2.68 a share, or 17.15%. Resource related stocks, however, were trading in the positive territory after the price of crude oil in the international market firmed up on fears that Turkey might initiate steps to attack Kurdish Workers Union, located in Northern part of Iraq. The price of oil, which briefly surpassed the US$84 a barrel mark, is recently quoted at US$83.61 a barrel in after-hours trading on the New York Mercantile Exchange The share price of BHP Billiton, the largest mining company in the world in terms of market value and production, which also earns about one-fifth's of its total revenues from oil trade, advanced by 39 cents, or 0.86% to A$46.59, while the share price of rival company, Rio Tinto, is trading at A$112.91, up 1.08%, or A$1.21 a share.
October 14, 2007 11:03 PM