Stocks climb after close election throws plans for a new tax into doubt. Rest of the market stays flat.
By ASSOCIATED PRESS
CANBERRA, Australia — Stocks in Australia's biggest mining companies rose on Monday as the government's plans for a new tax on their profits were thrown into doubt after the nation's closest election in almost 50 years delivered no clear mandate.Trading in the rest of the market was flat, however, and Australia's chamber of commerce urged companies to continue investing despite what will likely be two or three weeks of uncertainty about who will govern the country of the coming three years.RELATED:Australian parties seek backing of independentsGillard tries to form coalitionAustralian PM says elections too close to callAustralia votes on whether first woman PM survivesThe center-left Labor Party — which has ruled for the past three years and remains in control of the caretaker government — and the conservative Liberal Party are negotiating with independent and minor party lawmakers to decide which side can command 76 seats in the 150-seat House of Representatives."The continuation of the caretaker period of the Australian government, together with the prospect of a minority Australian government is not the ideal scenario for the Australian economy or business community," the chamber's chief executive Peter Anderson told reporters."The business community... needs to ensure that the Australian economy is well respected nationally and internationally and we can do that by getting on with the doing of business, not putting investment decisions on hold and not adding to any uncertainty," he added.On the first trading day since the election Saturday, Julia Gillard, the caretaker prime minister, said on Monday that the flat market showed "the market understands that stable government is continuing.""Obviously there is uncertainty over the election result, but there is no uncertainty over the fact that stable and effective government is continuing in this period of time," she added, without indicating when the next government would be sworn in.Mining stocks were buoyed by the voter backlash against Labor which had promised to impose a 30 percent tax on iron ore and coal miners profit to raise an additional 10.5 billion ($9.4 billion) in government revenue in two years.Stocks in Anglo-Australian mining giant BHP Billiton rose 31 AU cents to AU$38.21, while rival Rio Tinto climbed 79 AU cents to AU$72.37 in morning trading. Iron ore specialist Fortescue, whose chief executive Andrew Forrest was a vocal critic of the tax plan, rose 6 AU cents to AU$4.70.Adrian Leppinus, a client adviser for brokerage Cameron Securities, said that BHP and Rio "have been very strong.""There is commentary this morning that because Labor doesn't have a stranglehold, it is probably a positive for the iron ore and coal stocks," he added.By noon, the benchmark S&P/ASX200 index edged up 0.06 percent to 4,433.6 points, while the broader All Ordinaries index had risen 0.05 percent to 4,464.4 points.
var cont = `Sign up for The Jerusalem Post Premium Plus for just $5
Upgrade your reading experience with an ad-free environment and exclusive content