Australian Index Falls 1.7%; Westpac, Wesfarmers Down on Earnings

Marcus Jacob
16 Feb, 2012
New York City

Australian stocks faced selling pressure after Westpac Bank reported weaker than anticipated earnings. Investors took the latest monthly decline in unemployment in stride. Weak copper prices also dragged resource sector. Wesfarmers reported flat net income growth.

[R]8:00 PM Sydney – Australian stocks faced selling pressure after Westpac Bank reported weaker than anticipated earnings. Investors took the latest monthly decline in unemployment in stride. Weak copper prices also dragged resource sector. Wesfarmers reported flat net income growth.[/R]

Stocks were under pressure after Westpac reported weaker than expected results and investors

Australia’s unemployment rate declined to 5.1% after the economy added 46,300 jobs in January after losing revised 35,700 jobs in December, according to the statistics bureau.

The monthly data when put in the context of seasonally adjusted employment picture look different. The ABS estimated in the first seven months of the current fiscal year 11,900 jobs were created and hours worked in the months are flat or slightly declining.

The ASX 200 index decreased 72 to 4,181.4 and All Ordinaries index lost 70.2 to 4,257.2.

In trading, 2.02 billion shares changed hands worth $5.7 billion. Of the shares traded, 317 increased, 681 decreased and 378 were unchanged.

The Australian dollar edged higher to close at $1.0736.

Stock Movers

BHP Billiton Ltd fell 80 cents to $35.30 and Rio Tinto Ltd declined $1.59 to $67.28. Fortescue Metals Group declined 22 cents to $3.98.

Lynas Corporation Limited closed lower 4 cent to $1.22 and Iluka Resources decreased 59 cents to $16.28. Newcrest Mining fell 52 cents to $33.94.

Oil Search Limited decreased 9 cents to $6.39, Santos Limited fell 27 cents at $13.55 and Woodside Petroleum decreased 38 cents to $34.85.

Commonwealth Bank of Australia decreased 38 cents to $49.85 and ANZ decreased 50 cent to $21.20 and

Westpac inched lower 74 cents to $20.22 after it reported quarterly profit of $1.5 billion in the first quarter and took a hit of $200 million in its trading business. Chief executive Gail Kelly also indicated that some of its branches may be closed from the network of 1,200 within a few years.

Goodman Fielder declined 3 cents to 48 cents after the baker reported first half profit declined 77% from a year ago period.

David Jones Limited increased 1 cent to $2.38 and Harvey Norman Holdings closed unchanged at $1.98. Woolworths decreased 35 cents to $24.78.

Wesfarmers Limited fell 76 cents to $29.09 and the mining and retailing conglomerate reported 0.3% increase in first half profit and dividend was increased 5 cents to 70 cents.

Qantas Airways Ltd rose 10 cents to $1.65, Virgin Australia closed unchanged at 35.5 cents and Flight Centre decreased 38 cents to $20.07.

Caltex decreased 19 cents to $12.35 after the company said it is prepared to shut down its refineries after writing down its asset value by $1.5 billion. The petrol refineries around the world have been forced to adjust new competition from South Korea and India.

QR National closed down 5 cents to $3.71.