Weaker Inflation Lifts Australian Indexes, CPI Rises 0.6%

Marcus Jacob
26 Oct, 2011
New York City

Australian stocks gained a fraction after inflation in the September quarter edged lower on weaker food, beverage, drugs and electronics prices. The dollar fell on the hopes of a rate cut at the next meeting in December.

[R]6:00 PM Sydney – Australian stocks gained a fraction after inflation in the September quarter edged lower on weaker food, beverage, drugs and electronics prices. The dollar fell on the hopes of a rate cut at the next meeting in December.[/R]

Australian stocks gained on the hopes of a rate cut after latest measures of inflation showed a decline.

The ASX 200 index increased 0.4% or 14.6 to 4,242.5 and All Ordinaries index gained 0.3% or 13.1 to 4,300.8.

The Australian dollar eased 0.6% to US$1.036.

Consumer price index in the September quarter increased 0.6% from the previous quarter and jumped 3.5% from a year ago. The data released by the Australia’s statistics bureau said the inflation gauge declined on the lower food and energy prices.

Core rate of inflation increased 0.3%, significantly below what economists had expected.

The index in the June quarter had gained 0.9% 3.6% from the year ago. Stronger dollar helped electronics prices to declin3 3.3% and drug prices fall 5%. Alcohol prices increased 0.5% and food and non-alcohol beverage prices fell 0.2%.

Stock Movers

BHP Billiton Ltd closed down $0.23 to $36.94 and Rio Tinto Ltd added 11 cents to $66.74.

Fortescue Metals increased 7 cents to $4.62 Bannerman decreased 0.005 cents to 28.00 cents and the company last week said it will seek a higher bid from China based Hanlong Mining of $144 million.

Oil Search Limited increased 13 cents to $6.18, Santos Limited rose 2 cents to $12.45 and Woodside Petroleum added 35 cents to $34.83.

Cochlear Limited fell $0.44 to $57.90.

Commonwealth Bank of Australia closed up 39 cents to $49.11 and National Australia Bank increased 28 cents to $24.95. ANZ edged up 4 to $21.59. Westpac gained 30 to $22.30.

David Jones Limited closed up 12 cent to $3.36 and Wesfarmers Limited increased $0.17 to $31.90.

Woolworths Limited increased 11 cents to $24.15 and James Hardie Industries SE increased 3 cents to $6.11. Treasury Wine Estate closed up 5 cents to $3.84.

Qantas Airways Ltd closed up 1 cent to $1.51.