ASX Hot stocks: Fortescue, Qantas and Lend Lease

ASX surges 0.7%, despite weak leads from offshore

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 June 17, 2013 4:32 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has closed up 0.7%, at 4,825.9, after mounting a comeback from earlier heavy falls and jumping at the close. Again it was the big banks doing the heavy lifting, while resources stocks fell. No surprise then that the financial sector was the best performer, while utilities and consumer staples also saw decent gains.

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

Fortescue Metals Group (ASX:FMG) lost 2.7% to close at $3.25, as shares in the iron ore miner continue to slide. Back in February, Fortescue was trading above $5, as the iron ore price rose to more than US$150 a tonne. Iron ore has slipped since then, dropping to US$110 a tonne, but is up slightly to US$114 a tonne. With Fortescue being a pure iron ore play, further falls in the iron ore price could see the company forced into unwanted action, such as asset sales, or cutting back its expansion program.

Qantas Airways Limited (ASX:QAN) gained 2.6% to end at $1.40, with media reports suggesting that China Southern was considering buying a 10-15% stake in the Flying Kangaroo earlier this year. Chinese airlines are growing rapidly and plan to ramp up flights to Australia. Qantas recently expanded its code share agreement with China Eastern, which included a co-investment in Jetstar Hong Kong. China is now Australia's second-largest source of foreign visitors, behind New Zealand.

Lend Lease Limited (ASX:LLC) fell 7.5%, to close at $8.65, after the property and infrastructure developer and manager announced that it was restructuring its Australian construction and infrastructure business. Lend Lease also announced that it will incur substantial restructuring costs this financial year, as it battles weak construction markets, both in Australia and Europe. While the company said that its expected earnings would be in-line with market forecasts, it seems investors weren't having a bar of it.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned.

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