Australian Home Prices Decline 4.8%; Fortescue in Focus

Marcus Jacob
01 Feb, 2012
New York City

Australian indexes eased after home prices fell December quarter. Wesfarmers traded down ahead of its quarterly results tomorrow. Fortescue Metals Group declined after a key investor cut its stake to 1%.

[R]8:00 PM Sydney – Australian indexes eased after home prices fell December quarter. Wesfarmers traded down ahead of its quarterly results tomorrow. Fortescue Metals Group declined after a key investor cut its stake to 1%.[/R]

Australian markets eased after investors focused on the fall in domestic home prices and overlooked the expansion in manufacturing in China.

Home prices declined 4.8% in 2011 and prices fell 1% in the last quarter to December from the previous quarter when prices dropped 1.9%, according to the data released by the Australian Bureau of Statistics.

Home prices have been soft for much of the year as housing starts remained weak and difficulty of mortgage loans for the households that are entering the housing market.

Home prices declined 1.6% in Melbourne from the third quarter and fell 1.3% in Brisbane but rose 0.7% in Canberra and gained 0.5% in Perth.

In a separate report issued by the Housing Industry Association, home prices declined 4.9% in December and prices for single family homes fell 7.7%.

The ASX 200 index decreased 37 or 0.9% to 4,225.7 and All Ordinaries index fell 34.7 or 0.8% to 4,291.

The Australian dollar edged up above $1.06.

In trading, turnover declined to 1.48 million shares worth $3.43 billion and of the shares traded 433 increased, 510 decreased and 421 closed unchanged.

Stock Movers

BHP Billiton Ltd fell 57 cents to $36.91 and Rio Tinto Ltd closed down 42 cents to $68.74.

Fortescue Metals Group decreased 7 cents to $4.98, Lynas Corporation Limited closed higher 1 cent at $1.34 and Iluka Resources decreased $0.73 to $17.59. Newcrest Mining fell 22 cents to $33.50.

Fortescue Metals Group was under pressure after a key investor Lucadia National confirmed in a regulatory filing it sold 100 million for January 25. The company sold 92 million shares in June 2011 and 30 million in 2010.

Telstra Corporation Limited decreased 3 cents to $3.30 after the company lost its court case filed by Optus for its exclusive deal for the display of online games on its mobile devices.

Oil Search Limited traded down 4 cents to $6.56, Santos Limited closed down 14 cents at $13.32 and Woodside Petroleum decreased 21 cents to $34.

Boral fell 6 cents to $3.98 after it reaffirmed its semi-annual earnings outlook and sold its Indonesian operations for US$135 million.

Commonwealth Bank of Australia decreased 22 cents to $50.44 and ANZ declined 14 cents to $21.27 and Westpac inched lower 30 cents to $20.85. National Australia Bank fell 19 cents to $23.66.

David Jones Limited increased 7 cents to $2.66 and Wesfarmers Limited decreased 59 cents to $29.71 ahead of its quarterly earnings tomorrow. Harvey Norman Holdings closed down 2 cent $2.04.

Woolworths Limited closed down 9 cents to $24.70 and JB Hi-Fi Limited closed unchanged at $12.60. Billabong International Ltd closed up 3 cents to $1.91 and Kathmandu traded flat at $1.27.

Qantas Airways Ltd declined 2 cents to $1.56, Virgin Australia was unchanged at 32 cents and Flight Centre decreased 26 cents to $19.04.

QR National closed up 1 cent to $3.72.