Australian Retail Sales and Mining Investment Decline

Marcus Jacob
03 Sep, 2012
New York City

Resource stocks were on the decline in Sydney after latest data on capital spending showed a first decline in several years. Australian retail sales declined 0.8% in July and Chinese manufacturing growth declined to a nine-month low.

[R]7:30 PM Sydney – Resource stocks were on the decline in Sydney after latest data on capital spending showed a first decline in several years. Australian retail sales declined 0.8% in July and Chinese manufacturing growth declined to a nine-month low.[/R]

Stocks in Sydney were caught in the cross currents of weak economic data and the rising expectations from the central bankers in the Europe and the U.S.

The latest official read on Chinese manufacturing index dropped to a nine-month low. The PMI index decreased to 49.2 in August from 50.1 in July.

In addition, Australia’s retail sales declined seasonally adjusted 0.8% in July to $21.42 billion from the revised 1.2% increase to $21.58 billion in June, according to the data released by the Australian Bureau of Statistics.

In a separate report released by the statistics bureau showed that resource companies capital spending decreased $53 million to $1.02 billion in the quarter to ending in June.

The iron ore prices have consistently declined for the last two months and are now at a 3-year low of US$90 a ton and mining exploration budgets may fall further.

The ASX 200 index increased 13.60 to 4,329.70 and the broader All Ordinaries gained 12.58 to 4,351.60.

The Australian dollar decreased to US$1.0239 from US$1.031 on Friday’s close.

The Reserve Bank of Australian scheduled to hold its policy meeting tomorrow and is expected to hold reference rates at 3.5% for the third month in a row.

Stock Movers

Resources companies declined after the latest data on mining exploration spending showed a decline and BHP traded ex-dividend.

BHP Billiton Limited slumped 38 cents to $31.41 and, Rio Tinto Limited jumped 61 cents to $49.85 and Fortescue Metals Group added 2 cents to $3.56.

Iluka Resources climbed 24 cents $9.44 and Lynas Corporation Limited plunged 3.5 cents or 5.5% to 60.5 cents. Newcrest Mining increased 37 cents to $25.02. Kingsgate gained 4 cents to $4.32 and Whitehaven Coal slipped 5 cents to $3.22.

Transfield Services slid 7 cents to $1.76 billion; engineering contractors WorleyParsons declined 52 cents to $26 and Monadelphous Group dropped 25 cents to $19.84.

Oil Search Limited decreased 4 cents to $7.48 and Santos Limited up 2 cents to $11.25 and Woodside Petroleum gained 28 cents to $34.58. Sundance Energy added 2 cents to 70 cents.

Seven West Media lowered 7 cents to $1.40, Ten Network down 1 cent to 37.5 cents and Fairfax Media closed unchanged at 42 cents.

Harvey Norman Holdings slid 2 cents at $2.03, Woolworths jumped 38 cents to $30 and Kathmandu added 4 cents to $1.42.

Commonwealth Bank of Australia climbed 25 cents to $54.99 and Bank of Queensland increased 5 cents to $7.60. ANZ added 2 cents to $24.84. National Australia Bank gained 9 cents to $25.30 and Westpac Banking Corporation closed up 8 cents at $24.85.

Macquarie Group advanced 69 cents to $27.55. Perpetual Limited increased 24 cents to $26.72 and the financial services reported profit dropped 57% on restructuring charges.

David Jones Limited slid 3 cents $2.39 and Wesfarmers jumped 73 cents to $35.25. Billabong International Limited slipped 3 cents to $1.32. Breville Group edged down 1 cent to $5.44. Harvey Norman lowered 2 cents to $2.03.

Toll Holdings slid 2 cents to $4.61, Leighton decreased 16 cents to $15.83 and property developer Mirvac Group closed unchanged at $1.36.

Qantas added 2 cents to $1.17 and Flight Centre slumped 21 cents to $23.69 and Virgin Australia plunged 2.5 cents or 5.6% to 42.5 cents.

QR National decreased 4 cents to $3.46 and Telstra gained 3 cents to $3.88.