Smaller Increase in Australia

Chandrasekhar Atreya
01 Dec, 2010
New York City

Stocks in Australia stayed little changed after third quarter GDP expanded little. Rio Tinto plans a further investment of $1.2 billion in Pilbara to increase iron ore output. Australian employers face rising wage pressures and consumers worries expensive utilities.

[R]6:00 PM Sydney, Australia – Stocks in Australia stayed little changed after third quarter GDP expanded little. Rio Tinto plans a further investment of $1.2 billion in Pilbara to increase iron ore output. Australian employers face rising wage pressures and consumers worries expensive utilities.[/R]

Stocks in Sydney closed little changed after fluctuating in the session, after the Australian Bureau of Statistics released the weak GDP figures for the September quarter.

The ASX 200 Index added 0.05% or 2.20 to close at 4,586.60.

The Australian dollar was trading lower immediately after the Australian Bureau of Statistics released the softer than expected GDP data and closed at 96.46 U.S. cents in Sydney today.

The headline gross domestic product expanded by a seasonally adjusted 0.2% in the quarter to September compared with a downwardly revised 1.1% in the previous quarter. Over the year to September, GDP expanded by 2.7%, the Australian Bureau of Statistics said today.

Treasurer Wayne Swan said the latest GDP figures show that Australian economy remains “resilient.”

White Energy took the first step in adding a conventional coal mining arm to its business by making an offer to acquire two NSW assets from Cascade Coal for a A$500 million.

White Energy, five of whose directors own 60.1% of Cascade shares, was offered a free option agreement to purchase the New South Wales-based Mt Penny and Glendon Brook assets.

Rio Tinto, the mining giant, approved today another $1.2 billion investment to expand its iron ore capacity in the Pilbara region. The investment will increase output by 283 million tons per year by the second half of 2013.

So far in the year, total investment of A$2.7 billion has been announced in the Pilbara region since July.

Pressures from rising costs of living, essentially in utility prices, are the biggest concern for consumers in 2011, a new survey shows.

Mortgage Choice’s annual consumer sentiment survey found 27% of respondents worried about the rising cost of living as compared to 19% in 2009. The survey details released today showed that interest rates worry dropped to the second place as the biggest concern with 16% as compared to 19% in 2009.

The Business Council of Australia said today that a wages blowout due to a surge in wages in the mining sector could become the biggest headache for employers. The shortage of skilled workers has spread from the mining sector to other technical sectors, council President Graham Bradley warns.

Stock Movers

Banks and retailers were generally down but mining stocks gained on the back of stronger metal prices in London market.

National Bank of Australia lost 15 cents to close at A$23.30 and Australia New Zealand Bank lost one cent to close at A$22.65. Commonwealth Bank gained 24 cents A$48.52 and Westpac increased 8 cents to A$21.45.

Wesfarmers lost 10 cents to A$31.36 and Woolworths lost 20 cents to A$26.60. David Jones lost 5 cents to close at A$4.37.

BHP Billiton gained 1.08% or 46 cents to close at A$43.20. Rio Tinto also gained 1.08% to close at A$83.10 after saying it would spend $1.2 billion to increase iron ore output in Pilbara.

Qantas shares were down 2 cents at A$2.61 after a report showed that revenue per seat was down despite the carrier flying more passengers on its flight.