News

July 06, 2008

That Was The Week That Was… In Australia

By Our Man in Oz

Minews. Good morning Australia. It looks like you had a rough midweek ride and a smooth ending.

Oz. That’s a good way of describing what was possibly the worst week this year. Thursday in particular was a wipe-out, with Australian mining stocks finally getting caught in the ill winds blowing off North American and European markets. On Thursday alone the mining sector, as measured by the metals and mining index of the ASX, fell 6.7 per cent. On Friday, there was a modest recovery as the index was up by 1.3 per cent. What we wait to see now is whether Friday was a dead-cat bounce. With the U.S. closed, and your market continuing to retreat, it’s a fair bet that we’re in for more bad news next week.

Minews. The real question seems to be whether China is feeling the effects of problems elsewhere.

Oz. That is the $64 trillion question, to which no-one seems to have an answer. On the one hand last week saw the final shoe drop in the annual iron ore mating game with BHP Billiton “reluctantly” agreeing to an 85 per cent price hike, which has to have an exceptional effect on its profits. On the other, we saw the BHP Billiton share price fall by over five per cent to A$40.70 over the course of...