Record Weekly Drop in Australian Indexes in Nine Months

Marcus Jacob
11 Mar, 2011
New York City

Stocks in Australia declined on tracking the losses in Asian markets. Global sentiment dictated the trading in Sydney. Markets opened lower after U.S. weekly jobless claims rose, sovereign debt worries resurfaced in Europe and China reported a faster increase in inflation.

[R]5:00 PM Sydney – Stocks in Australia declined on tracking the losses in Asian markets. Global sentiment dictated the trading in Sydney. Markets opened lower after U.S. weekly jobless claims rose, sovereign debt worries resurfaced in Europe and China reported a faster increase in inflation.[/R]

Markets in Australia closed lower on weak signals in international markets, commodities markets and rising worries of inflation in China.

The ASX 200 index decreased 54.90 or 1.2% to 4,644.80 and the All Ordinaries index declined 56.50 or 1.2% to 4,734.80. The indexes lost 4.5% in the week.

The benchmark indexes fell in seven of the last ten trading days and dropped the most in a week in more than nine months.

The Australian dollar declined to US$1.0009 and crude oil futures fell US$1.66 to US$102.71.

The indexes declined sharply in overnight trading in the U.S. after weekly jobless claims rose more than expected and trade deficit in January surged 15%. Also, markets were nervous after Spain’s debt was downgraded but several analysts questioned the views of the rating agency.

Near home, China reported its first trade deficit last month and today said inflation rose faster than anticipated at 4.9%.

Stock Movers

Resource stocks closed lower after metals declined in London and New York. BHP Billiton declined 44 cents to $44.19 and Rio Tinto fell $1.62 to $78.80. Fortescue Metals decreased 16 cents to $5.88.

Insurance companies closed higher. Suncorp increased 2 cents to $8.19 and QBE Insurance lost 9 cents to $17.17.

Banks were lower at close. Commonwealth Bank decreased 44 cents to $50.86, ANZ declined 43 cents to $23.17 and Westpac declined 29 cents to $22.90.

Leighton Holdings, the construction company with several projects in the Middle East declined $1.23 to $28.85.