Stocks in Australia Up; NAB Net Rises 18%, Macquarie Net Drops 5%

Marcus Jacob
08 Feb, 2011
New York City

Australian stocks gained after the merger fever in the U.S. and record copper prices. Higher earnings from National Australia Bank lifted bank stocks. Macquarie Group declined after it estimated lower earnings. Cochlear first half net increased 16%.

[R]5:00 PM Sydney – Australian stocks gained after the merger fever in the U.S. and record copper prices. Higher earnings from National Australia Bank lifted bank stocks. Macquarie Group declined after it estimated lower earnings. Cochlear first half net increased 16%.[/R]

Stocks in Australian traded higher after mergers of $20 billion were announced in the U.S. on Monday. Banks gained on the news and commodities related stocks advanced on the optimism.

ASX 200 index increased 0.5% or 21.90 to closed 4,890.40 and the broader index rose 18.80 or 0.4% to 4,983.10.

National Australia Bank said earnings in the quarter increased 18% and took a reserve of $25 million related to Queensland flood damages.

Chief executive Cameron Clyne blamed the government and said banks may have to increase fees and charges if government implements the reforms that will inject more competition in the sector. He also proposed that banks should be allowed to increase the limit to 10% from 5% on covered bonds in its total asset.

Stock Movers

National Australia Bank increased 1.9% or 48 cents to close at A$25.48 after the bank reported fiscal first quarter earnings increased 18% to A$1.3 billion and slightly lower margins.

Macquarie Group declined 13 cents to A$41.10 after the bank estimated second half earnings to decline 5% to A$950 million from a year ago on lower trading volumes in markets.

Westpac increased 1.1% or 26 cents to A$23.66 and ANZ added 18 cents to A$24.42.

Cochlear gained 1.7% to $76.18 after the hearing implant maker reported first half net increase of 16% to A$87.23 million.

Record copper prices in London lifted resource stocks. Rio Tinto gained 1.7% or $1.46 to close up $87.32 and BHP Billiton added 43 cents to $46.98.

Copper closed a record high in London trading at $10,160 a ton on the worries that the supply worries from Australia and Chile.

Gold miner Newcrest added 22 cents to A$37.67.

Bradken, the engineering company dropped 5.2% to A$8.82 after the company reported first half net rose 1.1% to A$25.99, significantly lower than the analysts’ estimate of at least $35 million.

Myer, the retailer declined additional 2.4% or 8 cents to A$3.24 and David Jones fell 6 cents or 1.3% to A$4.47.