Gillard Leads Minority Coalition; Rates on Hold

Chandrasekhar Atreya
07 Sep, 2010
New York City

Stocks in Australia stayed little changed after the central bank extended its interest rate pause. Prime Minister Julia Gillard gets the support needed to form a minority government. Construction activity remained weak in August.

[R]6:00 PM Sydney, Australia – Stocks in Australia stayed little changed after the central bank extended its interest rate pause. Prime Minister Julia Gillard gets the support needed to form a minority government. Construction activity remained weak in August.[/R]

Australian stocks remained almost unchanged in the morning ahead of a decision from independent MPs at 3 p.m. and after the RBA left the rate unchanged. The index remained little changed despite support of two independent lawmakers to help form a minority government.

The ASX 200 Index lost 0.05% or 2.3 points to close at 4,573.20.

Reserve Bank of Australia kept the interest rates unchanged for a fourth time in a row after its meeting, judging that policy settings remain appropriate given the continued uncertainty about the global economy and the strong domestic growth.

Prime Minister Julia Gillard Tuesday clinched a deal with two independent lawmakers Rob Oakeshott and Tony Windsor, paving the way for her to form a minority government.

Construction activity remained weak in August with house building diving to its lowest level in 16 months, a report showed.

The Australian Industry Group/Housing Industry Association performance of construction index (PCI) was broadly unchanged falling 0.1% to 43.2 in August after a fall in July. The report showed that all sections of the construction industry were in the red in August, with the house building falling to 38.4, the lowest reading in 16 months.

Capital Mining signed a share subscription agreement implementing a company-transforming capital raising process under which it will secure funding over a period of a year and a half for A$3.2 million and a strategic partnership with China Metallurgical Investment.

MAC Services Group completed the purchase of a 33-hectare site at Narrabri in north-west NSW for construction of a village to service the coal mining industry.

AWB Ltd said drought in Russia and weather related damages to crops in Europe helped lift interest for Australian wheat.

“Wheat buyers were looking to Australian producers to make up for lost volume in global trade and the interest is helping us to generate better physical prices for wheat on top of the general improvement in world prices,” said general manager of commodities Mitch Johnson in a statement on Tuesday.

Sydney-based Commonwealth Bank of Australia, the biggest bank of the nation, sold A$1.5 billion of bonds in its biggest domestic debt sale in more than six months.

The lender sold A$500 million of 6.25% notes and A$1 billion of floating-rate securities due in September 2013, according to a statement from the company.

Sydney-based Fairfax Media Ltd, Australia’s second-biggest newspaper, lost a claim that it holds copyright on headlines and bylines published in its Australian Financial Review. Federal Court judge Annabelle Bennett ruled Tuesday that Reed Elsevier Plc’s ABIX service, which is included in the company’s LexisNews service, can publish synopsis of articles from the Australian Financial Review to its subscribers.

Victoria State is forecast to receive more rain this week after the worst flooding in more than a decade caused homes in rural areas to be evacuated.

“The next rain is moving in on Thursday and it is certainly going to have some more impact in the flood affected areas,” Melbourne-based Bureau of Meteorology forecaster Richard Carlyon said Tuesday by phone.

Melbourne-based Telstra Corp said it remains committed to investing in China after making a move to sell its stakes in property Web site SouFun Holdings Ltd, Chief Executive David Thodey said Tuesday.

Resource News

D’Aguilar Gold and its 86% owned iron and titanium subsidiary Ridge Exploration, have given the conditional approval for Coltstar Ventures, to proceed with its acquisition of Ridge.

Arc Exploration found strong gold-silver intercepts from its scout drilling on the Kojan vein system in Trenggalek project in Indonesia.

Ramelius Resources reported “extremely encouraging drill results” from Wattle Dam, 25 kilometers southwest of Kambalda in Western Australia.

Assay results of Zamia’s Anthony molybdenum discovery in Queensland have returned significant outcomes for the final drill holes.

Pluton Resources reported that assays from diamond hole drilling at the isthmus region on Irvine Island contains what appears to be high-grade ore.

Gainers & Losers

Virgin Blue Holdings Ltd led the gainers in the ASX 200 with a rally of 6.17% to A$0.43 followed by Isoft Group Ltd 3.85% to A$0.135 and QBE Insurance Group Ltd 3.58% to A$17.67.

Lynas Corp Ltd led the decliners in the index with a fall of 6.85% to A$1.155 followed by St Barbara Ltd 5.26% to A$0.36 and Transfield Services Ltd 2.98% to A$3.58.