Uranium shares rebound
AUSTRALIAN uranium stocks bounced back on the local bourse after a positive jump on Japan’s stock market.
However, analysts warn that the recovery could be shortlived if Japan’s nuclear crisis worsens.
Tokyo shares closed up 3.88 per cent – down from earlier gains of around 6 per cent – amid reports that work to prevent the stricken Fukushima nuclear plant from melting down was suspended because of high radiation levels.
The gains were driven by bargain-hunting following the biggest two-day sell-off on the Nikkei index for 24 years. This was despite a fresh fire yesterday in the No. 4 reactor at the Fukus him a plant that self eeeextinguished. CMC Markets chief market strategist Michael McCarthy said Australian uranium stocks regained between a quarter and a third of their plunge on Monday and Tuesday.
Uranium miner Paladin Energy Ltd gained 44 cents, or 13.5 per cent, to $ 3.70.
The stock had fallen 17.47 per cent on Tuesday to its lowest since mid-March last year after plunging 16.49 per cent on Monday.
Paladin, which does not have a commercial relationship with Japanese utilities, said it continued to believe the medium and long-term outlook for nuclear power remained positive.
‘‘ Recent events could further exacerbate the supply situation, ironically putting Paladin in an even better position with respect to global demand,’’ the miner said yesterday.
‘‘ There are more than 440 nuclear reactors operating safely around the world and growth of the fleet is assured with the 62 reactors currently under construction.’’
Rio Tinto Ltd majorityowned Energy Resources of Australia, the world’s fourth largest uranium producer, was up 73 cents, or 10.33 per cent, at $ 7.80.
ERA stock sank 12.23 per cent on Monday and fell a further 14.3 per cent on Tuesday.
Among j unior uranium explorers, Peninsula Energy Ltd jumped 2.4 cents, or 40.68 per cent, to 8.3 cents while Uranium Equities Ltd put on 1.4 cents, or 16.47 per cent, to 9.9 cents.