Australian Rates on Hold; Index Falls 1.4%

Marcus Jacob
06 Mar, 2012
New York City

Australian stocks declined after the Reserve Bank of Australia left its key lending rate unchanged at 4.25% for the second month in a row. Resources linked stocks and banks led the decliners. Current account deficit increased in the fourth quarter.

[R]8:00 PM Sydney – Australian stocks declined after the Reserve Bank of Australia left its key lending rate unchanged at 4.25% for the second month in a row. Resources linked stocks and banks led the decliners. Current account deficit increased in the fourth quarter.[/R]

Australian stocks closed lower after the Reserve Bank left its key lending rate unchanged and current account deficit widened in the last quarter.

Global markets and commodities fell after China lowered its economic outlook.

The ASX 200 index fell 58.3 to 4,204.7 and All Ordinaries index declined 58.7 to 4,295.5.

The Australian dollar edged lower to close at $1.064.

In trading, stock turnover increased to 2.16 billion shares and 317 stocks increased, 707 decreased and 360 closed unchanged.

Australian Bureau of Statistics estimated current account deficit in the fourth quarter to December increased to $8.374 billion from $5.824 billion in the previous quarter.

The Reserve Bank of Australia left its key interest rate unchanged for the second month in a row at 4.25%. Governor Glenn Stevens said in his prepared remarks that economic “growth is close to trend” and inflation is “close to target” the board decided that monetary policy is “appropriate for the moment.”

Stock Movers

Mining shares closed lower a day after China cut its economic growth target.

BHP Billiton Ltd decreased 81 cents to $34.58, Rio Tinto Ltd fell $1.47 to $63.62 and Fortescue Metals Group decreased 12 cents to $5.53.

Lynas Corporation Limited fell 1 cent to $1.12 and Iluka Resources closed down 49 cents to $16.48. Newcrest Mining decreased 67 cents to $31.82.

Gloucester Coal decreased 31 cents to $8.15 after the company recommended merger with China controlled Yancoal Australia.

Oil Search Limited decreased 16 cents to $7.09, Santos Limited fell 7 cents at $13.51 and Woodside Petroleum decreased 99 cents to $35.04.

Commonwealth Bank of Australia decreased 51 cents to $48.58, Westpac closed down 20 cents to $20.56 and NAB decreased 5 cents to $23.48. ANZ decreased 11 cents to $22.09.

David Jones Limited decreased 11 cents to $2.68 and Harvey Norman Holdings fell 2 cents to $1.96. Woolworths decreased 20 cents to $25.04.

Qantas Airways Ltd closed rose 1 cent to $1.75, Virgin Australia closed down 1.5 cents to 43.5 cents and Flight Centre fell 3 cents to $21.91.

QR National closed down 6 cents to $3.87.