Australian GDP Expands 1.2%; Macquarie Net Lags

Marcus Jacob
07 Sep, 2011
New York City

Australian GDP rose 1.2% in the second quarter after exports rebounded and coal shipments recovered from the lows during the natural disaster in the first quarter. Stocks surged more than 2% after the central bank governor issued a positive outlook on the economy.

[R]4:30 PM Sydney – Australian GDP rose 1.2% in the second quarter after exports rebounded and coal shipments recovered from the lows during the natural disaster in the first quarter. Stocks surged more than 2% after the central bank governor issued a positive outlook on the economy.[/R]

The ASX 200 index jumped 107.90 or 2.6% to 4,183.4 and All Ordinaries index added 102.2 or 2.5% to 4,262.9.

The Australian dollar closed up 0.03% to US$1.062 and gold price decreased $69.43 to US$1,837.20.

In trading, turnover increased to 2.3 billion shares and the trading value rose to $5.26 billion with 683 stocks gained, 356 declined and 339 were unchanged.

Australia’s gross domestic product increased 1.2% in the second quarter from the first and advanced 1.4% from a year ago quarter. The estimate of the first quarter was revised to 0.9% shrink from the previous estimate of a decline of 1.2%, according to the data released by the Australian Bureau of Statistics.

The economy struggled in the first quarter after coal shipments faltered on natural disaster but coal shipments have not fully recovered. Net exports in the quarter still subtracted 0.5% from the GDP calculation.

Before the release of the GDP report, Glenn Stevens, Governor of the RBA issued an optimistic outlook and said that economic conditions in the nation are better than the conditions during the financial crisis in 2008.

Stock Movers

BHP Billiton Ltd increased $1.35 to $38.23 and Rio Tinto added $2.19 to $70.60. Atlas Iron added 20 cents to $3.74.

Commonwealth Bank of Australia increased $1.51 to $47.49 and National Australia Bank added 80 cents to $22.94. ANZ advanced 77 cents to $20.03. Westpac gained 57 cents to $20.07.

Macquarie Group increased 37 cents to $23.53 and the investment bank lowered its earnings outlook after its first half net declined. The company said its first half net is expected to be lower than $403 million in the same period a year ago.

The bank blamed its weak profit outlook on the weakness in its trading, securities and investment banking divisions. The bank said it still estimates full year net to be better than the previous if market conditions do no worsen in the second half.

Macquarie is likely to bid for the aircraft leasing operations of Royal Bank of Scotland that may be valued between $6 billion and $8 billion.

Wesfarmers added 92 cents to $30.57 and its supermarket division Coles has been under pressure to source local products.