Australian Index Up 1.7%; Retailer Myer Issues Cautious Outlook

Marcus Jacob
15 Sep, 2011
New York City

Stocks in Australia rebounded on the optimism surrounding the euro zone. Myer, the department store estimated 10% decline in the current year earnings on flat sales. Rio Tinto announced new investment of $833 million in Pilbara region.

[R]4:30 PM Sydney – Stocks in Australia rebounded on the optimism surrounding the euro zone. Myer, the department store estimated 10% decline in the current year earnings on flat sales. Rio Tinto announced new investment of $833 million in Pilbara region.[/R]

The Australian stocks rebounded on the back of optimism in the euro zone and higher markets in Asia. German Chancellor Angela Merkel and French President Nicolas Sarkozy expressed confidence about the Greece’s place in the euro zone.

The video conference among Merkel, Sarkozy and Greek Prime Minister George Papandreou did not lead to any specific new announcement. The meeting was largely symbolic showing solidarity with the Greek government.

Greek Prime Minister Papandreou also reiterated that the country will stay on the course to trim the deficit and cut the government spending.

The ASX 200 index gained 65.90 or 1.7% to 4,071.7 and All Ordinaries index rose 62.8 or 1.5% to 4,153.2.

The Australian dollar closed up 0.5% to US$1.0289.

In trading, stock volume declined to 2.03 billion shares worth $6.47 billion.

Myer Estimates 10% Lower Annual Net

Myer, the department store chain operator, said fiscal 2011 net declined 0.6% from the previous year to $162.7 million and revenues dropped 5$ to $3.159 billion.

The company guided weak consumer spending and said current year annual net may fall as much as 10%.

The earnings expected to decline on $48 million increase in wages and rents and flat sales in the current fiscal year.

Chief executive Bernie Brooks said, “The consumer continues to be reluctant to spend.”

Stock Movers

Cochlear, the maker of hearing implants rebounded dropped $1 to $50.30.

BHP Billiton Ltd increased $0.73 to $37.63 and Rio Tinto added $1.03 to $69.38.

Newcrest Mining Limited declined 64 cents to $38.11 and Atlas Iron increased 20 cents to $3.66. OceanaGold Corp increased 8 cents to $2.64. Kingsgate Consolidated declined 30 cents to $7.83.

Iluka Resources increased 18 cents to $14.79.

Oil Search Limited increased 12 cents to $5.95, Santos added 27 cents to $11.21 and Woodside Petroleum increased 96 cents to $32.21.

Origin Energy added 26 cents to $13.09.

Commonwealth Bank of Australia increased $0.76 to $44.76 and National Australia Bank rose 52 cents to $22.33. ANZ added 39 cents to $19.41. Westpac rose 49 cents to $19.41.

Macquarie Group increased 21 cents to $21.45. Wesfarmers added 47 cents to $30.58.

Qantas Airways Limited added 5 cent to $1.54. Telstra increased 4 cents to $3.06.

Myer increased 4 cents to $2.10 after it estimated profit in the current year to decline as much as 10%.