Australian Index Falls 1%; Qantas, Malaysia Talks Fail

Marcus Jacob
09 Mar, 2012
New York City

The current account balance in Australia swung to a deficit of $673 million on weaker than expected exports. Insurer Australia Group said it plans to cut 600 jobs in the next three years. Qantas dropped its plan to set up a premium airline in Asia.

[R]8:00 PM Sydney – The current account balance in Australia swung to a deficit of $673 million on weaker than expected exports. Insurer Australia Group said it plans to cut 600 jobs in the next three years. Qantas dropped its plan to set up a premium airline in Asia.[/R]

Australian stocks traded higher after Greece announced higher than expected participation rate in its debt swap program.

In a broad advance, stocks gained after commodities and resources linked stocks led the rise. However, for the week the benchmark index declined.

The ASX 200 index increased 41 to 4,212 and All Ordinaries index gained 38.3 to 4,300.50. For the week, the ASX 200 index decreased 1.4%.

The Australian dollar edged lower to close at $1.051 after seasonally adjusted current account balance in January swung to a deficit of $673 million from the revised $1.32 billion in December.

In addition, China reported consumer price index in February slowed to a 20-month low to 3.2% from 4.5% in January.

Also, industrial production increased 11.4% in the first two months of the year from the year ago period and retail sales rose 14.7% in the period.

Beijing combines the January and February data of production, investment and retail sales to avoid distortions caused by the Lunar New Year holiday.

Stock Movers

IAG increased 9 cents to $3.29 after the insurer said it will trim 600 jobs over the next three years and restructure its commercial insurance division that will save annually $65 million a year by the end of 2015. The news was first reported by Business Day.

BHP Billiton Ltd increased 41 cents to $34.71, Rio Tinto Ltd increased $1.47 to $64.13 and Fortescue Metals Group increased 13 cents to $5.64.

Lynas Corporation Limited rose 10 cents to $1.18 and Iluka Resources closed up 26 cents to $16.72. Newcrest Mining increased $1.29 to $31.93 after gold prices rebounded in international markets.

Kagara plunged 5.7% or 1 cents to 16.5 cents after the company lowered its production estimate of zinc and copper.

Oil Search Limited increased 7 cents to $7.15, Santos Limited rose 24 cents at $14.38 and Woodside Petroleum increased 60 cents to $36.30.

Commonwealth Bank of Australia increased 4 cents to $48.08, Westpac closed up 28 cents to $20.69 and NAB increased 18 cents to $23.56. ANZ increased 14 cents to $21.93.

David Jones Limited increased 14 cents to $2.69 and Harvey Norman Holdings closed down 1 cent to $1.94. Woolworths increased 14 cents to $25.22.

Qantas Airways Ltd closed down 5 cent to $1.68 after the airline said it ended its talks to set up a premium airline in Malaysia that was also opposed by the pilots’ union.

The talks that lasted more than a year to set up a premium airline in partnership with Malaysian Airlines failed after the two failed to agree on business terms.

Alan Joyce, the company chief said Asia remained a priority for the airline and it “continued to explore opportunities” in the region.

Virgin Australia closed down 0.005 cent to 44 cents and Flight Centre decreased 40 cents to $21.38.

QR National closed up 2 cents to $3.86.