Mining production on track and Newscorp’s $2bn tax win

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) closed up 35.7 points, to 4,140.8, a rise of 0.9%, the third day in a row of positive moves. Optimism that the US Federal Reserve will indicate more quantitative easing to stimulate the US economy appears to be the main driver today.

The RBA minutes released today show the central bank is upbeat about the economy and that previous interest rate cuts have helped to shelter the local economy from global issues. Retailers won’t be too happy, as it appears likely there won’t be an August interest rate cut. In potentially good news for resources companies, the RBA suggested that China’s economy wasn’t slowing as much as previously anticipated.

The Australian dollar jumped on the news, gaining half a cent against the US dollar, and is currently trading around 102.9 US cents.

Company news

According to a report in The Sydney Morning Herald, News Corporation’s (ASX: NWS) Australian companies have successfully fought a decision by the Australian Tax Office to disallow $2 billion worth of currency exchange losses from 2001 and 2002. The ATO has been ordered to reassess the company’s liability, and pay News Corporation’s legal bill.

Fortescue Metals Group Limited (ASX: FMG) has met its target production of exporting more than 55 million tonnes of iron ore in the 12 months to June 2012, but costs on its expansion project have blown out by US$600 million, and the company could be forced to borrow up to US$1 billion to cover it. Fortescue’s shares fell 2% to close at $4.54.

Rio Tinto Limited (ASX: RIO) produced 62 million tonnes of iron ore in the June quarter (including its joint venture partners), beating the first quarter result of 59 million tonnes, which was affected by cyclones. Analysts appear to have expected more, with the company’s shares ending flat at $54.44.

Winners and losers

Newcrest Mining Limited (ASX: NCM) and Suncorp Group Limited (ASX: SUN) were the big winners today, with both stocks posting greater than 2% gains. Qantas Airways Limited (ASX: QAN) shares saw some sunlight, putting on 2 cents to close at $1.05.

BlueScope Steel Limited (ASX: BSL), Fortescue and Leighton Holdings Limited (ASX: LEI) were the big losers today, posting falls of 3.4%, 2.2% and 0.9% respectively.

Foolish takeaway

All eyes will be on Ben Bernanke and his address on the US economy tonight (our time). Given the sluggish growth in the US, investors will be hoping for news of further stimulus measures.  As for Australia, we seem to be doing quite well.

If you’re in the market for some high yielding ASX shares, look no further than our ”Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King owns shares in Leightons.  The Motley Fool ‘s purpose is to help the world invest, better.  Take Stock  is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!