Australian Inflation Flat; Banks Advance

Marcus Jacob
25 Jan, 2012
New York City

Australian stocks gained after inflation in the December quarter was flat and trailed expectations. For the year 2011, inflation increased 3.1%. Rio Tinto confirmed its majority stake in the Canada based Ivanhoe Mines that is active in Mongolia.

[R]8:00 PM Sydney – Australian stocks gained after inflation in the December quarter was flat and trailed expectations. For the year 2011, inflation increased 3.1%. Rio Tinto confirmed its majority stake in the Canada based Ivanhoe Mines that is active in Mongolia.[/R]

Australian stocks traded higher after the latest read on the inflation was better than expected and commodities prices gained in international trading.

The ASX 200 index increased 47 or 1.1% to 4,271.3 and All Ordinaries index rose 42.70 to 4,329.10.

Consumer price inflation in the quarter to December was unchanged according to the latest data released by the Australian Bureau of Statistics. The prices increased 3.1% in the year 2011 compared to price increase of 3.5% in the year ending in September. In the third quarter inflation increased 0.6%.

The quarterly prices were flat after fruit prices declined 13.4% and vegetables prices fell 5% and pharmaceutical prices declined 5.6%. Domestic holiday travel increased 7.3% in the quarter and rent gained 1%.

The Australian dollar declined in trading but jumped back above $1.05 after the release of the inflation data.

Stock Movers

BHP Billiton Ltd rose 34 cents to $37.42 and Rio Tinto Ltd closed unchanged at $68.35 and the mining company said it has increased its stake to a majority in Ivanhoe Mines that is active in Mongolia.

Fortescue Metals Group decreased 6 cents to $4.86, Lynas Corporation Limited closed higher 6.50 cents at $1.345 and Iluka Resources decreased $0.30 to $18. Newcrest Mining rose 31 cents to $33.15.

Whitehaven Coal increased 10 cents to $5.53 after the coal miner said production increased 2% in the quarter to December. Atlas Iron declined 14 cents to $3.12 after it lowered its annual production outlook in the year on the disruptions linked to Cyclone Heidi.

Monadelphous gained more than 1% to $21.82 after it estimated first half sales to increase between 21% and 27%. Leighton and Macmahon Holdings also closed higher on the back of the higher than expected revenues estimate at Monadelphous.

Oil Search Limited traded up 3 cents to $6.87, Santos Limited closed up 5 cents at $13.63 and Woodside Petroleum increased 2 cents to $33.97.

Commonwealth Bank of Australia increased $1.20 to $51 and ANZ increased 47 cents to $21.42 and Westpac inched higher 72 cents to $21.30. National Australia Bank closed higher 48 cents to $24.20.

David Jones Limited increased 4 cents to $2.38 and Wesfarmers Limited increased 12 cents to $30.38. Harvey Norman Holdings closed down 1 cent $2.03.

Woolworths Limited closed up 22 cents to $24.91 and JB Hi-Fi Limited decreased 33 cents to $11.69. Billabong International Ltd closed up 2 cents to $1.89 and Kathmandu closed unchanged at $1.22.

Qantas Airways Ltd was flat at $1.60, Virgin Australia closed up 1 cent to 31.5 cents and Flight Centre declined 1 cent to $19.44.

QR National closed up 2 cents at $3.67.