Mining shares surge on PM change
- — 24 June, 2010 10:46
The share prices of Australia's miners look to have been boosted by the leadership change in Canberra, with investors betting a controversial resources tax may be watered down.
At 1015 AEST companies that saw a big sell-off when the federal government's resources super profits tax (RSPT) was announced saw their shares move higher, despite mixed leads overnight.
Shares in Fortescue Metals Group Ltd were up 18 cents, or 4.06 per cent, at $4.61, Rio Tinto had risen $1.76, or 2.5 per cent, at $72.30 and BHP Billiton had gained 80 cents, or 2.04 per cent, at $39.94.
CMC Markets analyst David Taylor said he thought there was a direct link between the election of Julia Gillard as Australia's next prime minister and the rise in resources stocks.
"There is a pretty direct correlation, and the people have spoken," Mr Taylor said.
"Overnight, metals were mixed, and the basic fundamental offshore lead was mixed overnight.
"There is hope of a possible watering down of the resources tax now that the leadership change has been announced.
"With the tax factored in, company values fell, and now with the tax now looking like it might not be as intense, valuations naturally rose on the back of that, and share prices are rising," he said.
On Thursday, Julia Gillard was elected leader of the Labor Party, to become Australia's next prime minister, ousting incumbent Kevin Rudd in a leadership contest prior to the market's open.
