Australian Gold Mining Stocks Rise, Led by Lihir; Ansell Slumps

Australian gold stocks such as Newcrest Mining Ltd. and Lihir Gold Ltd. rose along with the price of the precious metal after North Korea fired missiles over the Sea of Japan.

Ansell Ltd., the world’s biggest maker of surgical gloves, slumped after the company told analysts to cut their earnings forecasts for the second day in a row.

The S&P/ASX 200 Index added 3.2, or 0.1 percent, to 5107.9 as of 2:11 p.m. in Sydney. About five stocks rose for every four that fell. U.S. markets were closed yesterday for a holiday.

The index is less than 5 percent from its May 11 record. It had slumped as much as 9.8 percent from its high as central banks lifted interest rates globally. The Reserve Bank of Australia today left its benchmark interest rate unchanged.

“Gold stocks rallied after the missile news, but the rest of the market is ignoring it,” said Leigh Gardner, Head of Sales Trading at ABN Amro Australia. “Investors are focused on market fundamentals and getting the interest rate scare behind them.”

New Zealand’s NZX 50 Index advanced 0.3 percent to 3609.54 as of 4:11 p.m. in Wellington.

Newcrest Mining, Australia’s biggest gold miner, gained 44 cents, or 2.1 percent, to A$21.74. Lihir, which owns a mine in Papua New Guinea, rose 10 cents, or 3.4 percent, to A$3.05.

Gold for August delivery rose as much as $16.50, or 2.7 percent, to $632.50 an ounce in after-hours trade on Comex division of the New York Mercantile Exchange. It traded at $630.10 at 12:26 p.m. Sydney time.

Safe Haven

North Korea launched at least six missiles over the Sea of Japan today, defying demands from the U.S., China, Japan, South Korea and Russia not to test the missiles.

Gold has rallied during previous instances of turmoil or political unrest. Spot gold surged 5.3 percent on Sept. 11, 2001, when terrorists attacked the U.S. The metals rose as much as 1.5 percent on March 8 after a report North Korea test-fired two short-range missiles near its border with China.

Ansell slid 70 cents, or 7.6 percent, to A$8.47 after the company said earnings-per-share for the fiscal year started July 1 will likely be less than 50 cents, down from between 54 cents to 57 cents in the year ended June 30. The company, which yesterday said analyst estimates were “too high,” said higher latex prices and investments to boost growth will weigh on earnings.

The S&P/ASX 200 Index’s futures contract for September fell 0.1 percent to 5099. The broader All Ordinaries Index added 0.5 point to 5061.2.

The following shares also rose or fell. The stock symbols are in brackets after the company names.

Australian stocks:

Australian Mining Investments Ltd. (AUM AU), a copper explorer, soared A$1.86, or 35 percent, to A$7.11 before it was halted from trade. The shares yesterday surged 79 percent after the Australian newspaper said Xstrata Plc may make a takeover bid.

De Grey Mining Ltd. (DEG AU), a minerals explorer, jumped 3 cents, or 21 percent, to 17.5 cents. The company said it found “significant” potential deposits of zinc, lead, copper, gold and silver at its Orchard Well and Tabba Tabba projects.

James Hardie Industries NV (JHX AU), the building materials maker that has agreed to compensate people sickened by asbestos in its products, fell 8 cents, or 1 percent, to A$7.62. The company’s asbestos liability could rise to A$3.9 billion, more than double KPMG’s A$1.5 billion estimate of future claims, the Sydney Morning Herald said, citing analyst estimates based on longer incubation periods than assumed by KPMG.

Transpacific Industries Group Ltd. (TPI AU), the biggest waste company in Australia and New Zealand, slid 25 cents, or 3.7 percent, to A$6.60. It fell for a second day after saying it plans to raise A$250 million ($186 million) by selling stock to fund its acquisition of Waste Management New Zealand Ltd.

United Group Ltd. (UGL AU), whose businesses range from engineering to property services, fell 9 cents, or 0.6 percent, to A$14.38. Credit Suisse Group cut the shares to “neutral” from “outperform” after a recent rally.

Source: bloomberg.com