Australian Indexes in Worst Weekly Loss in Eight Months

Marcus Jacob
18 May, 2012
New York City

Australian stocks traded lower and the benchmark index closed down 2.7% on Friday and plunged 5.6% in the week. The weekly loss was the worst in the last eight months. The Australian dollar traded near the low of the year.

[R]8:00 PM Sydney – Australian stocks traded lower and the benchmark index closed down 2.7% on Friday and plunged 5.6% in the week. The weekly loss was the worst in the last eight months. The Australian dollar traded near the low of the year.[/R]

Australian stocks plunged today and in the week as global economic woes dampened the outlook for the commodities prices and Australia’s exports.

Resource stocks closed down after as demand for commodities from China is expected to remain flat or decline in the current year and the rising uncertainty in the euro zone lower the economic outlook for the globe.

The ASX 200 index declined 110.90 or 2.7% to 4,046.50 and All Ordinaries index shrank 109.65 or 2.6% to 4,098.84. For the week the ASX index plunged 5.6%, the worst weekly decline since September and for the year the index closed flat.

In stock trading, turnover increased to 2.03 billion shares worth $5.99 billion and 226 shares gained, 841 decreased and 332 closed unchanged.

The Australian dollar traded near the low of the year at 97.95 U.S. cents.

Stock Movers

Industrea closed unchanged at $1.23 after General Electric announced a $700 million friendly takeover of the mining equipment maker.

David Jones Limited decreased 7 cents to $2.20, Harvey Norman Holdings closed down at 5 cents to $1.93 and Woolworths slumped 26 cents to $26.68.

Myer slipped 10 cents to $2.15 and Kathmandu fell 5 cents to $1.20. Billabong International Limited slides 5 cents to $2.10.

Mining and resources linked companies traded volatile as storms gather in the euro zone and Chinese bank lending remained flat.

BHP Billiton tumbled $1.31 or 4% to $31.46 and said it will no longer participate in a joint venture to mine silver, zinc and lead in north Queensland.

Rio Tinto plunged $2.96 or 5% to $55.20.

Lynas Corporation Limited inched down 4 cents to 88.5 cents and Iluka Resources shrank 90 cents to $12.18. Newcrest Mining surged 92 cents to $25.03 and Kingsgate fell 2 cents to $5.11.

Coalworks closed down at 1 cent to $1.01 after it asked shareholders to reject a $142 million takeover offer and a separate move for the resignation of its chairman and chief executive.

Oil Search Limited slipped 16 cents to $6.59 and Santos Limited declined 41 cents to $11.96. Orica plunged 52 cents to $25.19.

Commonwealth Bank of Australia plummeted $1.62 to $49.40 but earlier dropped as much as 2% after the bank reported third quarter cash profit increased 3% from a year ago to $1.75 billion.

The bank retained its annual earnings outlook of $7 billion but said demand for loans are subdued and competition for deposits is driving the profit margins lower.

Bank of Queensland slumped 26 cents to $6.15. ANZ slides 73 cents to $20.84. National Australia Bank shrank $1.03 or 4.2% to $23.32 and Westpac Banking Corporation plunged 81 cents to $20.41.

Insurance Australia Group fell 6 cents to $3.32 after the company said it plans to review its UK business and may pursue a sale of the business.

Stockland decreased 6 cents to $3.16, Leighton tumbled $1.25 or 6.9% to $16.80 and Toll Holding slides 10 cents or 6.8% to $4.31.

Qantas slipped 6 cents to $1.43, Virgin Australia unchanged to 42 cents and Flight Centre down 6 cents to $18.63.

QR National decreased 6 cent to $3.29.