ASX Hot Stocks: Telstra, Fortescue and Papillon

ASX sees topsy-turvy day as RBA cuts cash rate by 0.25%

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published May 7, 2013 4:38 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has finished down 0.2% in a topsy-turvy day, with shares sliding throughout the day, until the Reserve Bank announced a 0.25% cut to interest rates, which saw the market rocket up, and then slide into the close.

The Australian dollar has dropped against the US dollar, now buying 101.9 cents, following the RBA's cut to interest rates.

Here's why these three stocks are hot right now.

Telstra Corporation (ASX: TLS) lost 5 cents to close at $5.01, after the giant telco announced that it had bought $1.3 billion of new spectrum auctioned off by the federal government. The purchases will be financed through debt, and spectrum licences have a term of 15 years, and will allow Telstra to enhance its network, through faster speeds and wider coverage on its superfast 4G network. Rural and regional areas should be prime beneficiaries, as some of the spectrum can travel relatively longer distances.

Fortescue Metals Group (ASX: FMG) closed up 2.2% at $3.69, after yesterday announcing the official opening of its Firetail Mine, its third mine in five years. Firetail is a key component in the Solomon project that will see Fortescue lift production to 155 million tonnes per annum by the end of 2013. Firetail itself will produce 20 million tonnes, while the second development, the Kings mine will produce another 40 million tonnes per year. Shares in ASX listed iron ore miners rose, despite iron ore falling below US$130 a tonne in the last few days.

Papillon Resources (ASX: PIR), a gold explorer focused on projects in Mali, dropped more than 10% to close at 84 cents. More than 21 million shares changed hands, around 20 times its average daily volumes. While the company had no news to report, Mali is an extremely dangerous place to operate in. In January this year, 41 foreign workers were kidnapped from an oil production facility in neighbouring Algeria. Political instability hit the country a year ago through a military mutiny, which resulted in civil unrest and widespread looting.

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