3:00AM New York, 7:00PM Sydney - ASX 200 index rose 1.3% as resource stocks gained after oil prices soared. Woolworths reports 10% rise in third quarter sales. Rio Tinto iron ore production rises 16%.

Market Sentiments

ASX 200 index gained 1.3% or 69.9 to close at 5,470.30.

The preliminary market turnover was 1.3 billion shares worth $5.29 billion, with 671 shares up, 476 down and 345 unchanged. The most traded stock was Telstra Corporation with 62.62 million shares worth $284.52 million.

Market Driver

Rio Tinto Group reaped the benefits of its expansion program after its global production of iron ore soared 16% on the first quarter of 2007.

According to the results released by the group today, first quarter iron ore production reached 43 million tons in the Pilbara, Western Australia, up 15% compared with the first quarter of 2007 as the iron ore operations deliver their rapid expansion program.

The group also benefited from strong contribution from Rio Tinto Alcan in the quarter, with a significant uplift in production compared to the first quarter of 2007. Bauxite increased by 106%, alumina by 236% and aluminium by 386%, following a good performance from the Canadian smelters, the company said.

On a proforma basis, it added, the respective increases for bauxite, alumina and aluminium were 20%, 10% and 2% respectively. However the group said mined copper production declined by 6% compared with the first quarter of 2007, primarily reflecting lower grades at Kennecott Utah Copper and Northparkes locations.

It also indicated that its Australian thermal and coking coal production was affected by heavy rains, notably in Queensland where the coal industry generally suffered production and logistics disruption but uranium production was 20% higher than in the previous year.

During the quarter the company reached agreement on the first two sales under its planned program to divest $10 billion of assets in 2008. The sale of the Greens Creek silver, lead and zinc mine in Alaska for $750 million was announced and the sale of the Cortez gold mine in Nevada was completed for $1.695 billion.

Commenting on the first quarter''s production results, chief executive Tom Albanese said: """"Our expansion drive continues to pay off with a record-breaking first quarter for the iron ore and aluminium product groups. Markets remain very strong and the prices of many of our products are at record highs, bearing out our view that the US slowdown will have little effect on global metal and mineral supply and demand balances.”

Meanwhile Albanese again rebuffed speculation that his company was working with other companies to institute a counter bid to BHP Billiton’s bid.

According to an ING Bank research report, Rio was mounting a defensive bid that could include the disposal of the petroleum and mining assets. Australia''s second largest oil and gas producer, Woodside Petroleum Ltd was cited as a potential partner in the counter bid.

Rio''s share closed up 1.8%.

Gainers and losers

Of the ASX 200 index stocks, Sundance Resource led the gainers with a rise of 12.8% followed by increases in Centro Retail GR of 9.2%, in Arrow Energy Ltd of 9.2%, in APN/UKA European of 7% and in Queensland Gas of 7.5%.

Of the ASX 200 index stocks, Aquarius Platinum led the decliners with a fall of 4.5% followed by losses in Challenger Finance of 3.7%, in Invocare Ltd of 3.7%, in Tatts Group Ltd of 3.7% and in Iluka Resources of 3.6%.

Woolworths third quarter sales rises

Australia''s largest retailer today announced third quarter sales rise of 10.2% from continuing operations.

The company reaffirmed its net profit forecast, given that in February it registered between 19% and 23% growth.
Woolworths’ chief executive Michael Luscombe said, """"Woolworths continues to gain value from the solid platform created by continuing to focus on lower costs, lower prices and on-going management emphasis on range, quality, value and convenience for the customer.""""

Woolworths'' food and liquor division anchored the result, with sales rising 9.3% to $7.6 billion in the quarter on the price increases at Woolworths supermarkets and liquor outlets by 4.5% in the quarter, as compared to 2% experienced in the first half. The retailer opened six supermarkets and six new Dan Murphys liquor stores during the quarter.