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| Weekly Commentary Archive | | For archival copies of the Weekly Commentary click here... | | | | 27th October 2009 | The Australian share market went through a soft patch but maintained its firming trend over the week. The market generally withstood weakness on Wall Street although resource and financial stocks came under downward pressure. Mining giant Rio Tinto lost some ground but the stock has been very strong over the last month or so. In contrast, RIO’s far larger competitor BHP eased a little after signaling softer Chinese demand for commodities following recent stockpiling. BHP reported record quarterly iron ore output driven by improved performance at its Western Australian operations. Unlike RIO, BHP’s share price has done next to nothing over the month. In the financial sector, the big four banks were mixed. National flag carrier Qantas was steady after reporting that it saw encouraging signs for the economy and no further declines in its business. Gold miners Newmont, Lihir Gold and Newcrest were soft after a strong run. Oil sector stocks Woodside, Santos and Oil Search gained ground.
Weakness on offshore markets rubbed off on the New Zealand share market over the week, but the underlying tone remained positive. Sentiment was buoyed by news that Pyne Gould Corp’s $247 million rights issue was almost fully subscribed, attracting 90 percent support. Fletcher Building suffered bouts of occasional weakness but the stock, which has had a strong run since its capital raising in March, did not take long to regain its upward momentum. Investor patience is yet to be exhausted when it comes to fledgling coal miner, Pike River Coal, which gained despite signaling that it will need still more for working capital before its first shipment early next year. PGG Wrightson, in which PGW has a minority stake, was soft as it went about its own capital raising. PGW’s attempts to get on a more secure footing, via a cornerstone shareholding by China’s Agria, have struck a rough patch in the form of negative media coverage of the deal.
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