Australian Indexes at 2-week High; New Home Starts Drop 12.8%

Marcus Jacob
14 Mar, 2012
New York City

Australian stocks traded near a 2-week high following a rally in international markets. New home starts fell sharply in the final quarter and for all of 2011 dropped 12.8%. Fortescue Metals Group plans to raise $1 billion in a bond offering to fund expansion.

[R]8:00 PM Sydney – Australian stocks traded near a 2-week high following a rally in international markets. New home starts fell sharply in the final quarter and for all of 2011 dropped 12.8%. Fortescue Metals Group plans to raise $1 billion in a bond offering to fund expansion.[/R]

Australian stocks gained tracking the advance in international markets and investors overlooked another weak set of data from the domestic housing market.

The ASX 200 index increased 39.6 to 4,287.20 and All Ordinaries index gained 39.1 to 4,375.64. The indexes are trading at a 2-week high on the rising expectations about the U.S. economy. Market indexes in the U.S. are up between 8% and 17% and the Nikkei index in Japan is up 19% in the year so far.

In trading, 2.2 billion shares changed hands worth $5 billion shares with 409 stocks declining, 658 increasing and 367 closed unchanged.

New home construction starts declined 6.9% in the fourth quarter to December, third quarterly decline in a row. Australian Bureau of Statistics revised the decline in the third quarter to 5.8%.

After adjusting for seasonality, new private home construction fell 2.7% in the final quarter of 2011 and new residential units dropped 13.9%. In the quarter, 33,653 home starts declined 13% to 33,653 units and for 2011 fell 12.8% to 148,100 starts.

Yesterday, the ABS said loan approvals for investment housing in January declined seasonally adjusted 7.1% and new loans for owner occupied homes fell 6% from a year ago in the moth.

Total value of all loans issued for the housing market decreased 2.3% after adjusting for seasonality to $20.73 billion after rising at a 2.1% rate in December.

Stock Movers

BHP Billiton Ltd increased 46 cents to $35.61, Rio Tinto Ltd increased 95 cents to $65.30 and Fortescue Metals Group rose 6 cents to $5.83 after the company said it will sell US$1 billion of bonds to fund its expansion plans.

Lynas Corporation Limited rose 3 cents to $1.25 and Iluka Resources closed up 51 cents to $17.06. Newcrest Mining decreased 56 cents to $31.30.

Graincorp extended gains for the second day by 10 cents to $8.73 after the Swiss based Glencore International is reported to offer $5.2 billion for Canada based rival Viterra.

Oil Search Limited increased 15 cents to $7.14, Santos Limited increased 17 cents at $14.57 and Woodside Petroleum decreased 31 cents to $35.59.

Commonwealth Bank of Australia increased 43 cents to $48.80, Westpac closed up 16 cents to $20.90 and NAB increased 18 cents to $23.86. ANZ increased 19 cents to $22.30.

David Jones Limited fell 4 cents to $2.75 and Harvey Norman Holdings closed up 1 cent to $1.92. Woolworths increased 17 cents to $25.59.

Qantas Airways Ltd closed up 1 cent to $1.74 and maintenance work contractor demonstrated outside the Brisbane airport demanding higher wages.

Virgin Australia closed up 1 cent to 46.5 cents and Flight Centre increased 32 cents to $21.82.

QR National closed up 5 cents to $3.95.