Australian Retail Sales Rise; Home Construction Dips Again

Marcus Jacob
01 Dec, 2011
New York City

Australian stocks soared following a surge in international markets after U.S. Fed coordinated dollar swap lines with five central banks and offered more dollar liquidity. Retail sales increased 0.2% in October, fourth monthly rise in a row but home building approval declined for the second month.

[R]8:00 PM Sydney – Australian stocks soared following a surge in international markets after U.S. Fed coordinated dollar swap lines with five central banks and offered more dollar liquidity. Retail sales increased 0.2% in October, fourth monthly rise in a row but home construction approval declined for the second month.[/R]

Australian stocks extended gains for the fourth day after U.S. Federal Reserve agreed to offer dollar swap lines to five other central banks and cut interest rate to 50 basis points.

The move is intended to offer more dollar liquidity in the euro zone as banks and companies struggle to attract new capital. The Fed opened the swap lines with the central banks of UK, Canada, the euro zone, Japan and Switzerland.

The market move was also positive after China lowered its bank reserve ratios and opened more liquidity in the financial system.

The ASX 200 index added 108.8 or 2.6% to 4,228.6 and All Ordinaries index gained 2.5% or 103.3 to 4,184.70.

The Australian dollar edged higher to US$1.002.

Retail sales in Australian increased 0.2% in October after growing at 0.4% in September. In October, seasonally adjusted sales increased to $20.95 billion compared to downwardly revised $20.899 billion in September.

Retail sales rose for the fourth month in a row but the monthly increase has been declining for the last two months.

Separately, the Australian Bureau of Statistics said buildings approvals declined 12.6% in October from September and dropped 29.8% from a year ago month. The monthly decline, when compared to the previous year month, was the worst since January 2009.

Approval for home construction declined 7.5% in October after adjusting for seasonality.

Stock Movers

BHP Billiton Ltd fell $1.43 to $36.35 and Rio Tinto Ltd increased $2.97 to $65.92. Newcrest Mining decreased $1.10 to $35.70.

Fortescue Metals Group decreased 26 cents to $4.80, Lynas Corporation Limited closed up 10 cents at $1.32 and Iluka Resources added $0.80 to $15.40.

Bradken gained 15 cents to $7.48 after the maker of capital equipment for miners said it completed the placement of US$200 million of debt financing and extend its debt maturity.

Oil Search Limited traded up 10 cents to $6.38, Santos Limited gained 17 cents to $13.25 and Woodside Petroleum closed up $0.72 cents to $33.52.

Commonwealth Bank of Australia closed up $1.20 to $48.60 and National Australia Bank increased 76 cents to $24.17. ANZ edged up 60 cents to $20.50. Westpac added 56 cents to $21.13.

Tatts Group increased 1.3% to $42.33 after it agreed to buy the Tasmania based TAB for $1003 million.

David Jones Limited closed up 7 cents to $2.88 and Wesfarmers Limited rose $1.25 to $31.74. Harvey Norman closed up 3 cents at $2.13.

Woolworths Limited closed up 25 cents to $24.87 and James Hardie Industries SE increased 14 cents to $6.84.

Qantas Airways Ltd closed up at $1.58, Virgin Australia closed up 1 cent to 35 cents and Flight Centre rose 42 cents to $19.27.

Singapore Airlines and Virgin Australia were approved by the Australian regulators to enter into a network alliance

QBE Insurance Group Limited increased 51 cents to $13.97.