Queensland Flood May Cut GDP by A$2.5 Billion; Stock Index Gains

Chandrasekhar Atreya
06 Jan, 2011
New York City

[R][[6:00 PM Sydney, Australia

[R]6:00 PM Sydney, Australia – Sydney stocks gained after miners and banks closed higher. Floods in Queensland are estimated to cut Australian GDP by $2.5 billion. Fire at its coal mine in Hunter Valley forces Xstrata to evacuate miners and stop production.[/R]

Stocks in Sydney gained in the early trading but fell and pared losses intraday to close moderately higher, led by major miners and bankers.

The ASX 200 Index gained 0.21% or 10.10 to 4,725.00.

The Australian dollar traded just under parity with the U.S. dollar after losing a third of a U.S. cent following the release of strong U.S. economic data. The dollar closed at 0.9983 U.S. cents in Sydney today.

Australia’s gross domestic product is set to fall by A$2.5 billion after the economy was hit heavily by the Queensland flooding, reports the Australian. Inflation is likely to increase and delay several new projects.

Swollen rivers across Queensland have forced more evacuations as large as France and Germany, the Queensland government said today.

The federal government does not have nay plans to delay water reforms for the Murray-Darling river system, Prime Minister Julia Gillard said.

The services sector continued to under perform in December, according to a survey.

The latest Australian Industry Group/Commonwealth Bank Australian Performance of Services Index rose 0.2 to 46.4. The Australian PSI has been above 50 only for two months in 2010.

Xstrata Coal halted production and evacuated 55 mine workers at a mine in Blakefield South in the Hunter Valley Wednesday evening after a fire broke out.

Auto sales dropped 2.4% in December but sales in 2010 rose.

New vehicle sales were 1,035,574 for 2010, up 10.5% from the previous year, the Federal Chamber of Automotive Industries release today showed. Toyota led the market for the eighth year in a row and Holden Commodore was the most popular model for the 15th year in a row.

Rio Tinto chalked up $10.9 billion of sales before announcing that it sold 61% of its Alcan Engineering Products business to a group of investment bonds for an undisclosed amount.

Stock Movers

BHP Billiton gained 13 cents to A$45.14 and rival Rio Tinto surged 97 cents to A$86.04.

National Australia Bank gained 9 cents to A$23.76. Commonwealth Bank of Australia gained 4 cents to A$49.93 and Westpac Banking Corp rose 10 cents to A$22.18.

ANZ Bank fell 9 cents to A$23.09 and was the only major bank to decline in trade today.

Emeco Holdings Ltd was the largest gainer in the index with a rise of 7.73% to A$1.045 while Lynas Corp was the largest loser with a fall of 4.17% to A$2.07.