It’s amazing what 24 hours can do to investor sentiment, with yesterday’s downward turn into the red brushed off today on anticipation that United States Federal Reserve chairman, Ben Bernanke, will announce interest rate cuts in his speech tomorrow night.
The expectation stems from a letter from Bernanke to US Senator Chuck Schumer, where the former said the Federal Reserve is “prepared to act as needed” if market turmoil starts to hurt the broader economy.
The letter, coupled with anticipated interest rate cuts, saw the NASDAQ and S&P 500 indices gain 2.3% each overnight, fuelled by US stocks that staged a comeback.
Wall Street’s bounce back saw Australian resource stocks turn around from yesterday’s gloomy session, with BHP Billiton underpinning the upward trend, firming 69c (1.9%) to $37.75.
Rio Tinto also moved along the green trend, adding 98c (1.1%) to $91.10, and announced today it plans to refinance part of its $US40 billion debt – for its takeover of Alcan – through a bond issue.
“Rio will be looking to refinance part of the debt in due course in the capital markets through a bond issuance,” a Rio spokesperson told Dow Jones Newswires.
“The timing and scale of this will be determined by market conditions.”
Yilgarn Mining scored a month-rolling high of 79c before cooling to 69c – a surge of 15c or 27.8% – on news it is targeting a 100 million tonne resource following encouraging drill results from its Marillana iron ore project.
Yilgarn also announced it planned to change its name to Brockman Resources – subject to shareholder approval – to better reflect its Pilbara strategic focus.
Another iron ore play, Murchison Metals gained 8.8% or 40c to an intraday high of $4.95 after reporting a 46% increase to its Jack Hills project to 97Mt.
However at the end of the day, the news may have proved too good for some investors, with the company’s share price closing down 5c (1.1%) to $4.50.
Staying on the topic of percentage increases, nickel miner Sally Malay Mining reported a 454% boost in its net profit after tax for the year ending June 30.
There were increases all round for the nickel play in its report, with total revenue up 125%, cashflow up 210% and earnings before interest, tax, depreciation and amortisation jumped 179%.
The company also announced a maiden fully franked dividend of 12c per share.
While the increases may have been in the hundreds, Sally Malay’s share price didn’t quite reach those dizzying heights, firming up 28c (7.9%) to $3.81.
St Barbara climbed 6c (14%) to 49c on a new discovery of high-grade mineralisation 2km from its Gwalia mill near near Leonora in Western Australia.
Results from drilling in the new area returned intercepts of 40m at 6 grams per tonne gold and 30m at 7.2gpt gold at depths of 250-300m.
Share price hikes were not only limited to those that had news or reports to announce, with Gindalbie Metals adding 25.5c (18%) to $1.67 before being placed in trading halt.
The iron ore play was not the only one to boost its price on no news, with Fortescue Metals Group firming 6% to an intraday high of $32.62 and then cooling to $32.19, while Sundance Resources gained 2.5c (6%) to 44c.
