Australian Retail Sales Up 0.3%; Construction Spending Falls 4.6%

Marcus Jacob
29 Feb, 2012
New York City

Australian stocks lost steam in late trading after retail sales in January increased 0.3% and personal credit growth was weak and construction spending fell in the last quarter. WorleyParsons and Harvey Norman reported weaker than expected results.

[R]8:00 PM Sydney – Australian stocks lost steam in late trading after retail sales in January increased 0.3% and personal credit growth was weak and construction spending fell in the last quarter. WorleyParsons and Harvey Norman reported weaker than expected results.[/R]

Australian stocks opened higher after retail sales rose in January but construction spending decline in the last quarter. Also, personal borrowing declined in eight of the last ten months.

Retail sales increased 0.3% in January after declining 0.1% in December according to the Australian Bureau of Statistics. The sales increased 2.7% from a year ago to A$20.96 billion.

Separately, the latest data from National Bank of Australia showed that online sales increased 29% in 2011 to A$10.5 billion. Total retail sales account for 18% of gross domestic product.

Australian retailers have been facing challenges as more consumers shop online and take advantage of stronger dollar by purchasing goods from overseas retailers.

The ABS also reported construction spending declined 4.6% in the last quarter, highlighting the risk in the economy that relies so much on lumpy investments from the mining and resource industries.

The data from the Reserve Bank of Australia indicated personal borrowing fell 0.2% in January but total credit increased 3.5% from a year ago.

The ASX 200 index closed higher 35.9 to 4,298.6 and All Ordinaries index added 36.9 to 4,388.1. For the month, the ASX 200 index rose 0.9% and gained 6% in the year so far.

The Australian dollar edged higher to close at $1.081.

In trading, turnover surged to 2.35 billion shares worth $6.6 billion and 663 stocks increased, 410 decreased and 383 were unchanged.

Stock Movers

BHP Billiton Ltd increased 35 cents to $36.10, Rio Tinto Ltd fell 25 cents to $67.45 and Fortescue Metals Group gained 15 cents to $5.57.

Lynas Corporation Limited closed unchanged at $1.22 and Iluka Resources increased 23 cents to $16.70. Newcrest Mining added 18 cents to $33.49.

Oil Search Limited decreased 1 cent to $6.96, Santos Limited rose 40 cents at $14.42 and Woodside Petroleum increased 34 cents to $37.24.

WorleyParsons declined 43 cents to $29.37 and the company reported an increase of 18% in its first half profit.

Commonwealth Bank of Australia increased 38 cents to $49.43, Westpac added 22 cents to $20.90 and NAB increased 38 cents to $23.67. ANZ gained 7 cents to $21.95.

David Jones Limited decreased 5 cents to $2.70 and Harvey Norman Holdings closed down 9 cents to $2.07. Woolworths increased 36 cents to $25.31.

Billabong International Limited increased 10 cents to $3.08 after the company ended the talks with a leveraged buyout group and took steps to lower debt on its balance sheet.

Macquarie Atlas Roads edged 0.5 cent lower and the company said its revenues from toll road operations have increased and earnings are expected to be higher.

Qantas Airways Ltd closed up 1 cent to $1.73, Virgin Australia closed down 0.5 cent to 42.5 cents and Flight Centre increased 29 cents to $22.34.

Regional Express Holdings fell 2 cents to $1.08 despite the company reporting a sharp increase in first half profit on the rising demand for charter services from mining industry.

QR National closed up 3 cents to $3.91.