RBA in Australia Worries Global Slowdown; Cochlear Surges

Marcus Jacob
20 Dec, 2011
New York City

Australian stocks declined but cut losses after the latest central bank minutes of meetings confirmed the worries of global slowdown. Cochlear soared after it said it is prepared to return to market the recently recalled hearing implant.

[R]8:00 PM Sydney – Australian stocks declined but cut losses after the latest central bank minutes of meetings confirmed the worries of global slowdown. Cochlear soared after it said it is prepared to return to market the recently recalled hearing implant. Four largest banks are facing class action lawsuit of $200 million.[/R]

Australian stocks trimmed earlier losses in the day after the latest minutes of meeting from the Reserve Bank confirmed the worries of global slowdown. The central bank left the door open for another rate cut if the euro zone crisis drags the local economic conditions.

The ASX 200 index closed down 7.3 or 0.2% to 4,053.1 and All Ordinaries index declined 6.8 or 0.2% to 4,107.1. Trading volume was weak as investors stayed on the sidelines.

The Australian dollar edged higher and closed at US$1.001.

International markets in Europe and North America were cautious after European Central Bank President Mario Draghi offered a somber outlook for the euro zone. Investors were also on the sidelines ahead of the holiday season and growing realization that banks in the euro zone are facing downgrades just as they are looking to raise more capital to meet the revised guidelines.

Stock Movers

BHP Billiton Ltd fell $0.20 to $34.12 and Rio Tinto Ltd added 2 cents to $60.22.

Fortescue Metals Group decreased 6 cents to $4.36, Lynas Corporation Limited closed up 1 cent to $1.16 and Iluka Resources fell $0.28 to $15.50.

McMahon Holdings increased 2.5 cents to 57 cents after the mining engineering company revised higher its full year earnings by $10 million.

Alliance Aviation Services priced its initial public offering at $1.60 a share and closed up 10 cents. The company provides air lift services to mining industry and after the consolidation of five companies had a net deficiency of $19.5 million.

Oil Search Limited traded down 8 cents to $6.04, Santos Limited added 1 cent to $12.19 and Woodside Petroleum increased $0.09 cents to $30.33.

Commonwealth Bank of Australia increased $0.03 to $48.32 and National Australia Bank fell 21 cents to $22.94. ANZ edged down 24 cents to $20.41. Westpac inched higher 2 cents to $20.07.

Four largest banks were in focus and Westpac said will defend the class action lawsuit brought by 150,000 customers for the alleged unlawful fees and demanded $200 million.

Cochlear jumped $9.08 to $64.33 after the company confirmed that it has identified the root cause of the problem of a recent hearing implant recall and will be able to formulate a plan to return the implant to the market.

David Jones Limited increased 3 cents to $2.53 and Wesfarmers Limited decreased 1 cent to $29.70 Harvey Norman Holdings closed down 3 cents to $1.82.

Woolworths Limited closed down 29 cents to $25.61 and JB Hi-Fi Limited increased $0.20 or to $12.00.

Billabong International Ltd extended losses for the second day in a row declined 26 cents to $1.77 after the retailer of surf and skate apparel lowered its earnings outlook.

Qantas Airways Ltd closed down to $1.48, Virgin Australia closed unchanged at 35.5 cents and Flight Centre fell 33 cents to $18.58.

QBE Insurance Group Limited increased 4 cents to $13.18.