By Shani Raja
Nov. 24 (Bloomberg) -- Australian gold mining stocks climbed after the price of the metal jumped. Commonwealth Bank of Australia led banking stocks lower, while Suncorp-Metway Ltd. fell after increasing its forecast for bad debt.
Newcrest Mining Ltd. jumped 10 percent to its highest since Oct. 16 after bullion surged on Nov. 21, capping the biggest weekly advance since Sept. 19. Commonwealth Bank dropped 2.4 percent as funding costs climbed, while Suncorp lost 3 percent.
The S&P/ASX 200 Index rose 0.3 percent to 3,425.1 at the close of trading in Sydney, paring its decline this year to 46 percent and extending Friday's rebound from a five-year low.
The benchmark index is trading at about 9.2 times reported earnings, compared with an average 16 in the past five years, as the global credit freeze and economic slowdown have bitten into corporate earnings.
Newcrest rallied 10 percent to A$23.60. Lihir Gold Ltd., the second-largest gold mining company on the Australian Stock Exchange, soared 18 percent to A$2.13, the benchmark's fourth- best performer today.
Bullion rose 7.4 percent on Nov. 21 and 7.9 percent last week, the biggest such advance since September 19. Gold is the only asset in the Deutsche Bank Commodity Long Index that's posted gains over the past month, the bank said on Nov. 21.
Commonwealth Bank fell 2.4 percent to A$30.22. Funding costs rose after last week's 60 percent plunge in Citigroup Inc. shares sparked concerns about the fate of the company and its $2 trillion of assets. The rate Australian banks charge each other for three-month loans rose 3.8 basis points to 4.47 percent at 10:07 a.m. in Sydney.
Citigroup Inc. will have $306 billion of troubled mortgages and other assets guaranteed by the U.S. government under a federal plan to stabilize the lender after its stock fell 60 percent last week, the Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement today.
Suncorp slumped 3 percent to A$6.70. Bad debts may increase to as much as 0.4 percent of total loans in the 12 months ended June 30 next year, partly consisting of unspecified loans to Babcock, Brisbane-based Suncorp said.
The following stocks were among those that rose or fell on the Australian stock exchange.
Aristocrat Leisure Ltd. (ALL AU), the world's second-largest maker of slot machines, plunged 28 cents, or 7.4 percent, to A$3.52, the lowest since April 2, 2004. The company is targeting U.S. and Canadian customers with new American-themed games to boost its share of the world's biggest gaming market, according to Executive Chairman David Simpson.
Atlas Iron Ltd. (AGO AU), an iron ore producer which started operations at its Pardoo mine last month, leapt 10 cents, or 22 percent, to 55 cents, the most since April 29. Atlas said it's on course to meet its target shipping date of the first week in December, adding that it made new ``ore grade'' discoveries.
Australian Wealth Management Ltd. (AUW AU), a Sydney-based fund manager, rallied 13 cents, or 17 percent, to 89 cents, the most since Jan. 9, 2006. IOOF Holdings Ltd. announced a conditional all-scrip merger agreement with the company.
Iluka Resources Ltd. (ILU AU), the world's biggest zircon producer, dropped 18 cents, or 4.2 percent, to A$4.12, the most since Nov. 17. Iluka said it expects to have less of the mineral for sale next year because of lower output and the absence of stock.
Ironclad Mining Ltd. (IFE AU) soared 5.5 cents, or 42 percent, to 18.5 cents, the most since July 11, 2007. The company signed an accord with Wuhan Iron & Steel, China's fifth-biggest steelmaker by capacity, to jointly develop two iron-ore projects in Australia.
Mirvac Group (MGR AU) plunged 12 cents, or 9.8 percent, to A$1.11, the lowest since Oct. 29. The company's rating was downgraded to ``neutral'' from ``outperform'' by analyst David Burgess at Credit Suisse. The price target is A$1.47 per share.
Mt. Gibson Iron Ltd. (MGX AU), an iron ore producer, rallied 3.5 cents, or 17 percent, to 24 cents, the most since Nov. 5. The company said it finalized agreements with major shareholder APAC Resources Ltd. and Shougang Concord International Enterprises ltd. that will help raise A$163 million ($103 million).
OZ Minerals Ltd. (OZL AU), the world's second-largest zinc mining company, tumbled 7.5 cents, or 13 percent, to 52 cents, the lowest since April 30, 2003. OZ may have difficulty refinancing $600 million of debt next month as a global credit freeze restricts lending, UBS AG said.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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