Australian Retail Sales Rise 0.5%; Buildings Approval Fall 7.4%

Marcus Jacob
31 Mar, 2011
New York City

Australian stocks closed higher after retail sales in February increased 2.3% from a year ago on a rise in department stores sales and food sales. However, home construction approvals declined 7.4% in February. Total credit to private sector increased 0.5% in February from banks.

[R]4:30 PM Sydney – Australian stocks closed higher after retail sales in February increased 2.3% from a year ago on a rise in department stores sales and food sales. However, home construction approvals declined 7.4% in February. Total credit to private sector increased 0.5% in February from banks and other lending intermediaries.[/R]

Australian retail sales in February increased 0.5% to $20.53 billion according to the latest data released by the Australian Bureau of Statistics. Retail sales increased 2.3% form a year ago and monthly increase in sales in December and January were 0.1%.

The monthly increase was higher than expected and household goods retailing increased 2% and sales of clothing and footwear increased 0.9% in the month.

Separately, the statistics agency also reported approval of buildings declined 7.4% in February from January. The decline was less than the plunge of 11.6% in January and private sector home approvals increased 0.3%.

Separately, the Reserve Bank of Australia said total credit available to private sector by bank and financial intermediaries rose 0.5% in February from January when it increased 0.3%. The credit increased 3.4% from a year ago in the month.

A private report indicated that home prices in large metropolitan cities in Australia increased fractionally as the recent rate hikes take a bite out of the market.

Home prices in large cities increased 0.8% in February from a year ago month according to a private survey by RP-Data Rismark. The prices increased at a slower pace outside the metropolitan areas at 0.5% which is approximately 40% of the property market.

The median home price in large cities in Australia increased to $459,000, a decline from the recent peak of $473,000.

The ASX 200 index increased 15.7 or 0.3% to 4,837.90 and the All Ordinaries index increased 15.9 or 0.3% to 4,928.60.

The Australian dollar advanced after the release of retail sales data to US$1.0327 and crude oil increased 75 cents to US$105.02.

Stock Movers

BHP Billiton increased 95 cents or 2% to $46.56 and the mining company said it will spend US$319 million at its copper mine in Chile. The company also guided that its plan for Olympic Dam has expansion has advanced to feasibility stage.

Rio Tinto increased 47 cents to $84.75 and Newcrest Mining fell 0.3% to $39.82 and Fortescue Metals Group Limited increased 0.3% to $6.41.

Iluka Resources Limited extended gains for the second day by 8.7% to 16% to $13.30.

Woodside Petroleum declined 95 cents to $46.80 despite the increase in crude oil prices. The company said it had no explanation for 20% increase in stock price in the last two weeks in a filing with the Australian Stock Exchange.

National Australia Bank increased 22 cents to $25.85 and Commonwealth Bank decreased 25 cents to $52.40 and Westpac Banking Corp increased 0.25% to $24.33.

Sonic Healthcare increased 49 cents to $11.98.