Mining stocks falter on ALP win

7th September 2010

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AAP

MINING stocks fell a little after key independent MPs Tony Windsor and Rob Oakeshott handed the Labor Party the numbers to govern Australia for the next three years.

With the Liberal-Nationals coalition campaigning to abandon a controversial minerals resource rent tax (MRRT), mining stocks were seen as possible losers from the Labor Party win.

The S&P;/ASX200 materials index dipped shortly after 1500 AEST, when Mr Windsor indicated he would back the ALP to form government, dropping more than half a per cent to 12,173 points.

Minutes after Mr Oakeshott also said he would back the ALP the index again fell a little, although later pared back some of these losses.

At 1539 AEST, the materials sector was down 45.6 points, or 0.37 per cent, at 12,202.

Companies that campaigned against the MRRT were also pushed lower.

At 1544, Atlas Iron Ltd was down three cents, or 1.36 per cent, at $2.17, Fortescue Metals group had lost one cent to $4.93, and BC Iron was down two cents at $1.83.

Austock Securities senior client adviser Michael Heffernan said while initially unhappy with the Independents' decision, the market appeared to have backed the move.

"Watching the market as the revelations unfolded, as it progressed, the market dropped a bit at the start but then it picked up," Mr Heffernan said.

"I think what the market is happy about is that there is going to be a lot more discussion in this parliament about various issues than there was in the past.

"When (Mr) Oakeshott was talking there was a pretty clear indication that was going to take place, so we may not see anything like the peremptory mining tax for example, implemented," Mr Heffernan said.