BHP’s record result fails to impress and another banking downgrade

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) closed down 17.2 points, to 4,123.6, a fall of 0.4%. The market was dragged down by the big miners, and was less impressed that its Wall Street counterpart, by US congressional testimony, given by Federal Reserve Chairman, Ben Bernanke.

Australian economic conditions are at their strongest in 10 months, according to the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity, meanwhile the Australian dollar continues to rise, likely due to increased optimism in money markets, and is currently trading just above 103 US cents.

Company news

Rating agency Moody’s Investor Service has cut Bank of Queensland Limited’s (ASX: BOQ) rating from A3 to Baa1, due to the depressed state of the property market and earnings challenges faced by regional banks.

Asciano Limited (ASX: AIO) has flagged plans to spend $348m to expand its Port Botany facility with more automation, but 270 jobs will be lost once the project is completed in 2014. Chief executive, John Mullen has said that the introduction of automatic stacking cranes could increase capacity at the terminal beyond 2014 by 75% a year.

Shares in Gerard Lighting Group Ltd (ASX: GLG) have soared more than 26%, after the board recommended shareholders accept a $1.05 per share takeover offer from Champ Private Equity.

Metal Storm Limited (ASX: MST) shares have been placed in a trading halt, after Luxinvest Capital Advisors withdrew from a deal to contribute equity into the defence technology company. The deal was to raise around $4.5m to pay off debt and provide further working capital.

BHP Billiton Limited (ASX: BHP) share’s have been punished, despite a record production result. The company increased iron ore production to 159.5 million tonnes, 19% higher than the previous year. Investors appear to be deserting resource stocks because of their unwillingness to pay decent dividends. At the close, BHP shares were trading at $30.18, down almost 2% and not far off 52 week lows of $30.09.

Winners and losers

Incitec Pivot Limited (ASX: IPL) and Lend Lease Group (ASX: LLC) were the big winners amongst the majors, rising 2.9% and 2.1% respectively.

Resources stocks were hammered, with Alumina Limited (ASX: AWC), Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO) and Newcrest Mining Limited (ASX: NCM) all posting falls of more than 3%.

Foolish takeaway

Falling commodities prices are hurting our resources companies, despite record production volumes. Investors may also be worried about Chinese demand falling and the negative impact that is likely to have on commodity prices. The big miners don’t appear to be much concerned, instead focusing on the longer-term, as should we fellow Fools!

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 BHP.  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.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked…

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of The Motley Fool’s Top 3 Blue Chip Stocks for 2019.

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in a specially prepared FREE report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

See the 3 blue chip stocks

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.