Australian New Home Sales Plunge 9.4%, Spotless Agrees to Buyout

Marcus Jacob
30 Apr, 2012
New York City

Australian stocks gained after copper prices edged up but trading was subdued as markets were closed in Japan and in mainland China. New home sales dropped 9.4% in March and home sales dropped across all states as buyers stay away from record high sale prices.

[R]8:00 PM Sydney – Australian stocks gained after copper prices edged up but trading was subdued as markets were closed in Japan and in mainland China. New home sales dropped 9.4% in March and home sales dropped across all states as buyers stay away from record high sale prices. Spotless Group agreed to go private that will leverage its balance sheet.[/R]

Australian stocks jumped after copper prices gained but trading was subdued as markets in mainland China and Japan were closed and Europe is expected to lackluster as many are expected to stay away for the May Day holiday tomorrow.

The ASX 200 index gained 34.50 to 4,396.60 and All Ordinaries index increased 33.79 to 4,467.20.

Housing Industry Association reported new home sales in March dropped 9.4% in March to 5,443 after rising 3% in February. The housing market continues to remain depressed as sales have stumbled but home prices are stubbornly high.

In the year to March, home prices have dropped 4.4% as the economy struggles and sellers demand peak prices that many consider are “bubble like.”

Home sales in New South Wales dropped 9.7%, dropped 4.6% in Victoria and plunged 12% in Western Australia. Home sales fell 15.3% in Queensland as the region struggles to recover from natural disaster.

Stock Movers

Spotless Group jumped 4% to close at $2.56 after it agreed to be acquired by a leverage buyout fund Pacific Equity Partners for $720 million.

BHP Billiton closed up 66 cents to $35.55 and Rio Tinto soared 92 cents to $66.35.

Lynas Corporation Limited added 1 cent to $1.12 and Iluka Resources decreased 8 cents to $17.00.

Newcrest Mining advanced 59 cents to $26.30 and Kingsgate increased 16 cents to $6.20.

Oil Search Limited fell 4 cents to $7.35 and Santos Limited rose 4 cents to $14.02.

Woodside Petroleum surged 49 cents to $34.92 and said it has commenced liquefied natural gas production at its Pluto project after several delays. The project was conceived at the time when natural prices were trading above $10 a million of BTU and since then the price has collapsed to below $2 a unit after several large natural fields were discovered in the U.S.

David Jones Limited added 1 cent to $2.49, Harvey Norman Holdings closed unchanged at $2.02 and Woolworths gained 17 cents to $25.94. Myer rose 3 cents to $2.35 and Kathmandu fell 3 cent to $1.31.

Billabong International Limited slipped 6 cents to $2.64.

Westpac Banking Corporation increased 14 cents to $22.73 and Commonwealth Bank of Australia closed up 38 cents at $51.97. Bank of Queensland slumped 10 cents to $7.46. ANZ soared 25 cents to $23.91.

National Australia Bank increased 0.3% to $25.23 after the bank said it will cut a staff of 1,400 in the U.K. and take a one-time charge of $740 million as the banking sector reels from the years of reckless speculation and trading.

Stockland edged up 3 cents to $3.10.

Qantas added 2 cents to $1.63, Virgin Australia rose 2 cents to 40 cents and Flight Centre advanced 56 cents to $21.12.

QR National inched up 1 cent to $3.64.