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Mining stocks benefit from weaker Australian dollar

Mining stocks benefit from weaker Australian dollar

The miners led a rally on the ASX today as investors took advantage of a weakening Australia dollar against the greenback.

By 1.41pm the broader All Ordinaries had gained 17.3 points, or 0.3%, to 5,197.9 points and the benchmark S&P/ASX 200 had climbed 15.9 points, or 0.3%, to 5,214.3 points.

The Australian dollar fell to an 11-month low of 100.47 U.S. cents early today. It has since recovered to around 100.87 U.S. cents. 

RBS Morgans senior equities adviser Tony Russell said the weakening Australian dollar helped the resources giants overcome a drop in key commodity prices.

‘‘Because the resource companies are major exporters, trading in US dollars, when they convert that back to the Aussie (dollar) it’s getting better,’’ he told AAP.

The larger Materials sector was 95.3 points, or 1%, better off at 9,791.5 points.

Rio Tinto (ASX: RIO) and BHP Billiton (ASX: BHP) were among the top dollar gainers with increases of $0.63, or 1.1%, and $0.32, or 0.9%, respectively.

Rio reached $58.83, while BHP moved to $34.86.

Fellow iron ore play Fortescue Metals Group (ASX: FMG) added $0.03, or 0.9%, rising to $3.95.

There was a shift away from the gold miners, with Newcrest Mining (ASX: NCM) registering a $0.29, or 1.6%, fall to $17.32, while Northern Star (ASX: NST) slipped $0.02, or 2.9%, to $0.83.

Resolute Mining (ASX: RSG) dropped $0.03, or 3.8%, to $0.88.

The broader Financials sector found itself in the red, shedding 28.3 points, or 0.5%, to hit 5,750.1 points.

The big four all marked a downward shift, with ANZ (ASX: ANZ) $0.57, or 1.9%, weaker at $30.02 despite passing on more than the Reserve Bank of Australia’s cut in interest rate.

ANZ reduced its mortgage rate by 0.27 percentage points, compared to the RBA’s cut of 0.25 percentage points.

The Commonwealth Bank of Australia (ASX: CBA) $0.55, or 0.8%, lower at $70.49, while National Australia Bank (ASX: NAB) dropped $0.39, or 1.2%, to $32.29 and Westpac Banking Corporation (ASX: WBC) wiped off $0.31, or 0.9%, to $33.04.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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December 13 2016

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