Australia’s S&P/ASX Jumps Most in 11 Years as Citigroup Rescued

By Shani Raja

Nov. 25 (Bloomberg) -- Australia’s benchmark stock index rose the most in 11 years as the U.S. government’s rescue of Citigroup Inc. boosted confidence in the global financial system.

Commonwealth Bank of Australia, the nation’s biggest mortgage lender, soared by a record 13 percent. BHP Billiton Ltd., the world’s largest mining company, surged the most since 1987 after oil and copper jumped more than 5 percent yesterday.

The S&P/ASX 200 Index climbed for a third-straight day, gaining 198.30 points, or 5.8 percent, to 3,623.40 at the close in Sydney, the most since Oct. 29, 1997. It’s tumbled 47 percent from its Nov. 1, 2007, record as the credit crunch, fueled by the U.S. subprime crisis, squeezed economies around the world.

“Recapitalizing the banking system is a vital part of restoring normalcy to credit markets and stabilizing economic growth,” said Sean Fenton, who manages about $324 million at Tribeca Investment Partners in Sydney. “Allowing Citigroup to fail just wouldn’t have been an option.’

Commonwealth Bank gained 13 percent to A$34. Australia & New Zealand Banking Group Ltd., the nation’s fourth biggest lender, surged 13 percent to A$14.55, the most in more than a month.

U.S. stocks surged yesterday, with the Standard & Poor’s 500 Index rising 6.5 percent. That capped its biggest two-day rally since 1987 after the government decided to protect Citigroup from losses on troubled mortgages.

Commodities Rally

BHP rose 12 percent to A$26.22, while Rio Tinto Group, the world’s third-biggest mining company, rallied 6.9 percent to A$63.90.

Crude for January increased 9.2 percent to settle at $54.50 a barrel in New York yesterday, the biggest one-day gain since Nov. 4. A measure of six metals traded in London rose 5.1 percent.

Woodside Petroleum Ltd., Australia’s No. 2 oil producer, leapt 11 percent to A$33.50. Santos Ltd., the third biggest, jumped 12 percent to A$14.56, the most since 1986.

The following were among stocks that rose or fell in Sydney trading:

Precious-metals producers: Newcrest Mining Ltd. (NCM AU) surged A$1.85, or 7.8 percent, to A$25.45, the highest since Oct. 14. Aquarius Platinum Ltd. (AQP AU), a producer of the metal in South Africa and Zimbabwe, soared 75 cents, or 30 percent, to A$3.28, a record gain.

Gold rose to a five-week high as the dollar weakened, boosting the appeal of the precious metal as an alternative investment. Silver and platinum also rallied.

APN News & Media Ltd. (APN AU) rose 18 cents, or 7 percent, to A$2.75, the highest since Nov. 14. Fairfax Media Ltd. won’t bid for Independent News & Media Plc’s stake in APN News & Media Ltd., the Dominion Post reported, citing Fairfax Chief Executive Officer David Kirk said.

Brambles Ltd. (BXB AU) fell 56 cents, or 7.8 percent, to a record low A$6.65. The world’s biggest supplier of pallets used to move and store goods said an economic slowdown in the U.S. and Europe will curb earnings growth.

Harvey Norman Holdings Ltd. (HVN AU), Australia’s biggest furniture and electronics retailer, slumped 20 cents, or 8.2 percent, to A$2.24, the most since Nov. 13. The company said first-quarter earnings fell 32 percent as slowing consumer spending curbs sales.

Mirvac Group (MGR AU), an Australian real estate investment trust surged 19 cents, or 17 percent, to A$1.30, the index’s seventh-best performer. UBS AG raised Mirvac’s rating to “buy” from “sell.”

Mt. Gibson Iron Ltd. (MGX AU), an iron ore producer, rose 2.5 cents, or 10 percent, to 26.5 cents, the highest since Nov. 19. The company rallied 17 percent yesterday after saying it finalized agreements with major shareholder APAC Resources Ltd. and Shougang Concord International Enterprises Ltd. that will help raise A$163 million ($105 million).

Nexus Energy Ltd. (NXS AU), operator of the proposed Crux natural gas liquids project, gained 5 cents, or 15 percent, to 38.5 cents, the most since Oct. 21. Nexus said the Libra-1 exploration well in offshore Western Australia is set to “intersect the target reservoir” by the end of the week.

Qantas Airways Ltd. (QAN AU), Australia’s largest carrier, lost 7 cents, or 3 percent, to A$2.24, the most since Nov. 18. Qantas said it will cut capacity equivalent to the grounding of 10 planes because of a slowing in international business and a higher fuel bill.

Straits Asia Resources Ltd. (SRL AU), the Singapore-listed coal supplier whose stock has more than halved in three months, rallied 8 cents, or 12 percent, to 73 cents, the most since Oct. 17. The company yesterday said it received the first drawdown of a $300 million loan from Standard Chartered Plc.

Suncorp-Metway Ltd. (SUN AU), an Australian banking and insurance company, surged 46 cents, or 6.9 percent, to A$7.16, the highest since Nov. 14. Morgan Stanley recommended investors buy the stock ahead of a possible sale of its banking unit.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.