Australian Index Declines 1.5%, IMF Cuts Global Outlook

Marcus Jacob
12 Apr, 2011
New York City

Australian stocks and dollar turned lower after international worries overshadowed market sentiment. The IMF cut global economic output and trimmed the U.S. economic growth rate to 2.8% and Japan

[R]5:00 PM Sydney – Australian stocks and dollar turned lower after international worries overshadowed market sentiment. The IMF cut global economic output and trimmed the U.S. economic growth rate to 2.8% and Japan’s rate 1.4%. Crude oil declined.[/R]

Stocks in Sydney trading turned lower after the International Monetary Fund lowered global economic outlook and cut down the prospect of speedy recovery in Japan.

Japan suffered another round of earthquakes and the Japan’s safety agency lifted its risk rating at Fukushima to the highest level on the international scale to 7 from 5 at the troubled Fukushima Daiichi nuclear power plant.

The Japan Meteorological Agency said first quake struck Fukushima area with a magnitude of 4 and the second quake of a magnitude of 6.3 struck in the ocean east of Tokyo, swinging buildings in downtown Tokyo.

The IMF lowered global economic growth outlook in the current year to 4.4% and lowered the U.S. economic growth forecast to 2.8% from 3% and for Japan to 1.4% form 1.6%.

The ASX 200 index declined 72.50 or 1.5% to 6,898.70 and All Ordinaries index declined 74.70 or 1.5% to 4,990.20.

Australian dollar edged lower to US$1.0482 and crude oil declined 57 cents to US$109.35.

Stock Movers

BHP Billiton declined 66 cents or 1.3% to $48.89 and Rio Tinto fell 1.5% or $1.30 to $87.

Woodside Petroleum declined 2.7% or $1.33 to $46.83 and Santos Limited declined 4.5% or 75 cents to $15.74.

Banks retreated. Westpac declined 16 cents to $24.54 and National Australian Bank fell 15 cents to $26.26 and ANZ dropped 18 cents to $24.11.

Fortescue Metals Group said iron ore shipment in the quarter to March declined 16% to 8.4 million tons on heavy rains in the Pilbara region. The miner said ore mined in the quarter declined 12% but the prices rose 8% to US$162 a ton and cash production cost increased the same rate to US$44.96.

The fifth largest iron ore mining company in the world is the first company in the Pilbara region to release its production estimate.

Fortescue lifted the current quarter shipment estimate to 12 million tons and will be able to meet the target of 55 million tons of shipment in the financial year ending in June.