Australian Stocks Slide on Strong Dollar Worries

Marcus Jacob
29 Apr, 2011
New York City

Stocks in Australia skid on the recent surge in the dollar. Resource stocks edged lower as gold closed at a new peak for the eighth day in a row and silver flirted with the three decade high. Macquarie reported fiscal 2011 earnings declined 9% but guided higher earnings in the current year.

[R]4:45 PM Sydney – Stocks in Australia skid on the recent surge in the dollar. Resource stocks edged lower as gold closed at a new peak for the eighth day in a row and silver flirted with the three decade high. Macquarie reported fiscal 2011 earnings declined 9% but guided higher earnings in the current year.[/R]

Australian stocks declined on the worries that the recent surge in the dollar of nearly 10% in less than two months may prompt earnings downgrades at companies in sectors other than energy and mining.

The ASX 200 index declined 49.8 or 1% to 4,823.20 and the All Ordinaries index fell

The Australian dollar declined a fraction to US$1.0922 and crude oil fell 57 cents to US$112.29.

The Australian capital cities home prices declined 2.1% in the first quarter compared to the last quarter ending in December, according to the latest RP Data-Rismark report. Home prices declined 0.6% from a year ago quarter.

The national median home price in the quarter was $455,000. The sharp increase in home prices in the last five years and the recent increase in interest rate has increased the prospect of property price correction.

Macquarie reported full year 2011 earnings declined 9% to $956 million and the company guided higher earnings in 2012. The company now generates 30% of its income in the U.S. followed by 40% earnings in Australia.

Stock Movers

BHP Billiton declined 1% to $45.83 and Rio Tinto dropped 1.4% to $82.21 and Newcrest Mining dropped 1.4% to $41.45.

Gold closed at a new high for the fifth day in a row to US$1,538.39.

Woodside Petroleum declined 1.8% to $46.80, Santos dropped 2.5% to $15.12 and Oil Search edged lower 2.8% to $7.05.

Macquarie Group increased 0.7% to $35.16 after it reported fiscal 2011 profit of $956 million compared to its latest estimate of $947 million.

Commonwealth Bank increased 5 cents to $53.71, National Australian Bank decreased 2 cents to $27.08 and ANZ Bank fell 0.4% to $24.23.