Australian Index Soars 1.7%; GrainCorp Net Surges 66%

Marcus Jacob
26 May, 2011
New York City

Australian stocks rebounded after struggling for three days in a row as sentiment improved. In regional trading, Asian markets advanced after U.S. indexes and commodities prices regained their bearings. GrainCorp first half net soared 66% and guided higher annual net.

[R]5:00 PM Sydney – Australian stocks rebounded after struggling for three days in a row as sentiment improved. In regional trading, Asian markets advanced after U.S. indexes and commodities prices regained their bearings. GrainCorp first half net soared 66% and guided higher annual net.[/R]

Stocks in Sydney trading were strengthened after a sustained rise in the U.S. indexes in overnight trading and commodities gained. Crude oil declined but metals prices rose. Asian markets generally closed higher with South Korea leading the region with a rise of 2.3% and Japan adding 1.3%.

The ASX 200 index soared 1.7% or 75.50 to 4,660.20 and the All Ordinaries index added 1.6% or 73.50 to 4,735.10.

The Australian dollar edged higher to US$1.058 and crude oil price declined 53 cents to US$100.79.

In yet another sign of Australia’s two speed economy more home borrowers fell behind.

The latest data release by Fitch Ratings showed its measure of home mortgage loans in arrears for more than 30 days increased to 1.79% at the end of quarter to March from the 1.37% at the end of fourth quarter to December.

Delinquencies in the quarter also increased to 0.79% from 0.54% in the fourth quarter.

The report is one more evidence that housing market is slowing down in Australia. Home prices in the first quarter in eight largest cities declined 2.1% and only 55% of homes in auctions managed to find buyers in Sydney in May.

Stock Movers

Banks led the gainers after declining for three days in a row. Commonwealth Bank increased 39 cents to $50.40 and Westpac added 53 cents to $22.25. ANZ gained 37 cents to 37 cents to $22.07 and National Australia Bank inched up 17 cents to $26.15.

Perpetual increased 38 cents to $28.18 and the wealth manager said it plans to cut 128 jobs and sell its private wealth platform.

Energy complex stocks increased after crude oil prices in New York topped US101 a barrel. Santos increased 54 cents to $14.41 and Woodside Petroleum added 83 cents to $45.63.

GrainCorp increased 62 cents to $8.38 after it reported a record harvest and lifted its annual profit outlook. Revenues in the first half to March increased 47% to $1.35 billion and net soared 66% to $88 million from $53 million.

The grain handler guided full-year net to a range between $145 million and $165 million from the previous range between $115 million and $135 million.

The company declared an interim dividend of 15 cents and special dividend of 5 cents.