Australian Core Inflation Falls, Miners Decline

Marcus Jacob
25 Jul, 2012
New York City

Australian indexes declined as China was added to the list of worries in the euro zone. The dollar eased and resources linked companies traded lower. The latest data on the June quarter inflation showed a decline in core inflation.

[R]7:30 PM Sydney – Australian indexes declined as China was added to the list of worries in the euro zone. The dollar eased and resources linked companies traded lower. The latest data on the June quarter inflation showed a decline in core inflation.[/R]

Australian stocks traded lower as the euro zone worries mounted and investors await the troika report on Greek government progress.

Also, the IMF warned that Chinese economy faces significant downside risks as the government relies heavily on investments for economic growth.

Australia’s inflation in the June quarter was 0.5% and core inflation rate increased at the slowest pace in 14 years. In the previous quarter prices increased at 0.1% and on an annual basis rose at 1.6%.

On an annual basis, prices in three months to June increased 1.2% according to the latest data released by the Australian Bureau of Statistics.

Core inflation in the quarter increased at 1.95%, the slowest pace since the June quarter in 1998.

The ASX 200 index edged lowered 9.30 to 4,123.90 and All Ordinaries index fell 9.85 to 4,151.36.

The Australian dollar closed at US$1.022, edged lower to 84.70 euro cents and at 66 pence and 79.98 yen.

Australian bond yield fell to the lowest level in twenty years and 15-year bond yielded 3.025% and the spread to the U.S. Treasury shrank to the record low of 1.16%.

In commodities trading, New York oil futures traded near US$88 a barrel and gold in the spot market fetched US$1,584.

In trading, turnover increased to 1.9 billion shares to $3.4 billion and 543 stocks gained, 334 declined and 350 were unchanged.

Stock Movers

News Corp rose 2 cents to $21.27 as the troubled media and entertainment conglomerate faces more regulatory scrutiny in the UK. Rupert Murdoch controlled company faces multiple corruption and phone hacking scandal inquiries that led to the closure of one of the oldest tabloid in the UK.

Ten Network closed unchanged at 49.5 cents and Fairfax Media closed down 2 cents at 53 cents.

BHP Billiton Limited slipped 8 cents to $30.85 and traded near a 40-month low, Rio Tinto Limited plummeted 75 cents to $51.01 and Fortescue Metals Group increased 7 cents to $4.11.

Iluka Resources advanced 35 cents to $8.55, Lynas Corporation Limited closed down 1 cent to 79.5 cents, Newcrest Mining soared 97 cents or 4.6% to $22.15 and Kingsgate slumped 17 cents to $4.51. Whitehaven Coal decreased 13 cent to $3.76.

OZ Minerals dropped 10 cents to $7.43 after the mining company announced that its copper and gold production declined in the June quarter from the previous three months.

Oil Search Limited gained 9 cents to $6.69 and said it is close to finalizing its partner for a natural gas project in Papua Guinea.

Santos Limited fell 2 cents to $10.30. Woodside Petroleum slid 4 cents to $32.91.

Sundance Energy decreased 5 cents to 45 cents after its June production declined from previous month to 43,170 barrels of equivalent oil.

Metcash lowered 2 cents to $3.20, Harvey Norman Holdings closed down 4 cents to $1.97 and Woolworths added 4 cents to $28.17. Kathmandu closed unchanged at $1.12.

David Jones Limited rose 2 cents to $2.31. Telstra raised 3 cents to $3.89.

Billabong International Limited closed unchanged at $1.32 after chief executive said that the company is seriously considering the latest bid from the private equity group TPG.

Commonwealth Bank of Australia gained 8 cents to $54.86 and Bank of Queensland fell 3 cents to $7.0. ANZ slipped 11 cents to $22.64. National Australia Bank increased 16 cents to $23.82 and Westpac Banking Corporation declined 17 cents to $22.45.

Macquarie Group dropped 43 cents to $23.87 despite the company estimated improved fiscal 2013 results and Perpetual Limited plummeted 41 cents to $22.64.

Leighton declined 25 cents to $15.72, Stockland fell 2 cents to $3.18 and Toll Holdings increased 11 cents to $3.94.

Qantas closed down 1.5 cents to 99 cents, Flight Centre declined 21 cents to $20.57 and Virgin Australia closed unchanged at 39 cents.

QR National fell 1 cent to $3.16.