Australian Stocks Track Higher; QBE Net to Surge 60%

Marcus Jacob
14 Jun, 2011
New York City

Stocks in Australia closed higher after China reported strong economic data. QBE Insurance said first net profit is expected to increase as much as 60% on improved investment performance.

[R]4:30 PM Sydney – Stocks in Australia closed higher after China reported strong economic data. QBE Insurance said first net profit is expected to increase as much as 60% on improved investment performance.[/R]

The Australian stocks closed higher after China reported strong economic data. The commodities markets closed mixed. The strong retail sales increase and inflation above the central bank’s target showed a rising demand in China.

The ASX 200 index increased 22.9 to 4,585.0 and All Ordinaries index added 0.4% or 16.20 to 4,651.10.

Stock trading rebounded to 2.6 billion shares worth $4.9 billion. Of the shares traded, 405 increased, 724 declined and 409 were unchanged.

The Australian dollar increased a fraction to US$1.064 and crude oil price edged 19 cents higher to US$97.48 a barrel.

China’s consumer prices increased 5.5% in May from a year ago after rising at 5.3% in April. Industrial output increased 13.3% and fixed asset increased 25.8% in the year to May. Retail sales soared 16.9% from a year ago.

Stock Movers

Resources and energy linked stocks closed higher after China reported solid economic data.

BHP Billiton declined 10 cents to $43.05, Rio Tinto increased 1 cent to $80.21 and Newcrest Mining edged up a fraction.

Toll Holdings increased 13 cents or 2.6% to $5.22 and Brambles increased 14 cents to $7.34.

Banks led the gainers in trading.

ANZ increased 30 cents to $21.83, Commonwealth Bank of Australia added 86 cents to $50.45, National Australia Bank increased 31 cents to $24.48 and Westpac closed up 19 cents to $22.04.

Insurance Australia Group increased 2 cents to $3.58 and the company said it is too early to know financial losses linked to the latest New Zealand earthquakes.

QBE Insurance increased 10 cents to $17.28 and after the market close the company said its first half profit is expected to rise between 50% and 60% on improved investment performance.

Net profit is expected to increase to as much as US$704 million compared to US$440 million in the first half a year ago. The first half insurance profit margin will be lower than a year ago period on “unprecedented” level of catastrophe claims.

The retailer Colorado Group will shut down 100 underperforming stores and let go 1,042 people according to the receiver Ferrier Hodgson. The company undergoing restructuring is expected to earn $19 million in the current year. The company was placed in administration after it failed to agree with its 18 lenders and reschedule its $400 million in loans.