Australian Index Drops 2.3%, April Retail Sales Up 1.1%

Marcus Jacob
02 Jun, 2011
New York City

Australian benchmark index plunged following a weakness in Asia and tracking losses in overnight trading in New York. Markets in Asia dropped between 1% and 2%. Global economic slowdown worries trumped the ongoing euro-zone debt worries. April retail sales in Australia increased 1.1%.

[R]5:00 PM Sydney – Australian benchmark index plunged following a weakness in Asia and tracking losses in overnight trading in New York. Markets in Asia dropped between 1% and 2%. Global economic slowdown worries trumped the ongoing euro-zone debt worries. April retail sales in Australia increased 1.1%.[/R]

Australian stocks dropped tracking the weak sentiment in Asian markets after the indexes in New York dropped more than 2%.

Global markets were on the edge after China, India, UK and US reported weak or weakening economic reports. The rising worries stemming from the global economic slowdown overshadowed the ongoing market jitters arising from the euro-zone debt worries.

The ASX 200 index dropped 2.3% or 106.90 to 4,600.40 and All Ordinaries index fell 2.2% or 105.40 to 4,683.20.

Stock trading turnover decreased for the third day in a row to 2.21 billion shares worth $5.7 billion. Of the shares traded, 911 increased, 247 declined and 368 were unchanged.

The Australian dollar declined a fraction to US$1.065 and crude oil price edged 41 cents lower to $99.88 a barrel.

April retail sales increased 1.1% from March to $20.74 billion after falling 0.3% in March according to the latest data released by the Australian Bureau of Statistics.

April sales were the strongest since May 2009.

Stock Movers

BHP Billiton declined 98 cents to $43.55 and Rio Tinto fell $1.45 to $80.10.

BHP Billiton exercised its right to increase its stake in a natural gas joint venture off-shore Western Australian. BHP’s stake in WA-351-P in the Carnarvon Basin will increase to 80% and Tap Oil will control the rest.

The field is expected to have gas reserves between 2 trillion and 3 trillion cubic feet.

Banks led the decliners. ANZ fell 56 cents to $21.44 and Commonwealth Bank declined 96 cents to $49.40.

Westpac dropped 50 cents to $21.47 and National Australian Bank dropped $1.62 or 6% to $24.45 after the bank traded ex-dividend. NAB had gained more than 7% in the previous three sessions ahead of the dividend date.

Wesfarmers declined 54 cents to $32.59 after the coal miner lowered its estimates for the sales on the heavy rainfall in March.