Australian Indexes Slide 1.4%; Petrol Retail Price at 29-month High

Marcus Jacob
07 Mar, 2011
New York City

Stocks in Australia fell on the worries that near three-year record petrol prices will impact economic growth and contribute to inflation. The benchmark indexes dropped 1.4%. A private survey of employment ads in Australia indicated an increase of 1.2% in February.

[R]5:00 PM Sydney – Stocks in Australia fell on the worries that near three-year record petrol prices will impact economic growth and contribute to inflation. The benchmark indexes dropped 1.4%. A private survey of employment ads in Australia indicated an increase of 1.2% in February.[/R]

Australian stocks dropped tracking the losses in Asian markets and continued turmoil in the Middle East and North Africa.

Crude oil prices are now up 50% in the last eight months and investors are factoring elevated prices at least till the end of June. Libyan civil war has begun to affect retail petrol prices in Europe.

Retail petro price this weekend in Italy and the Netherlands shot up to 1.67 euros a liter petrol prices.

Average price of unleaded petrol at Australian pump stations increased 2.9 cents a liter to 139.2 cents in the week to March 6 and prices are expected to rise to 144 cents a liter in the next two weeks.

The latest data from the Australian Institute of Petroleum said that 29-month peak in petrol price is costing additional $30 a month a family.

The ASX 200 index declined 66.40 or 1.4% to 4,797.90 and All Ordinaries index fell 62.70 or 1.3% to 4,895.90.

Australian dollar eased to US$1.013 and crude oil increased $2.42 to $104.32 a barrel.

Of the stocks traded on the Australian Stock Exchange, 445 increased and 748 declined and 363 were unchanged. Trading turnover was $5.83 billion or 3.41 billion shares.

An independent survey conducted by ANZ showed that employment ads in February in newspapers and on the internet increased 1.2% from previous month, its tenth monthly increase in a row.

The employment ads increased to a weekly average of 193,555, an increase of 19.3% from a year ago.

The newspaper ads for employment increased 4.4% in month and on the internet increased 1%. The demand was lifted above the trendline growth as businesses and homeowners looked to repair and rebuild after the severe floods in Queensland.

The official employment data is scheduled to release on Thursday and is expected to show an increase of 22,000 jobs in the month.

Stock Movers

Salmat declined 5.6% or 23 cents to $3.89 after Telstra canceled its outsourcing contract with the company. The company also lowered its operating earnings outlook for the second half to between $4 million and $5 million and full year estimate to $87 million from $92 million.

Resource stocks closed mixed. Newcrest Mining rose 2 cents to $40.04 and BHP Billiton decreased 93 cents to $46.32 and Rio Tinto declined $1.37 to $84.15.

Banks closed lower on the worries that higher petrol prices at pump will contribute to inflation and higher interest rates. National Australia Bank decreased 38 cents to $25.14, Commonwealth Bank declined 96 cents to $51.69, ANZ eased 25 cents to $23.49 and Westpac dropped 26 cents to $23.22.