Australian Inflation Jumps to 1.4%, Global Worries Weigh on Stocks

Marcus Jacob
24 Oct, 2012
New York City

Australian markets eased after inflation jumped more than expected in the three months to September but still within the target range set by the central bank. The latest increase was driven by the introduction of carbon tax.

[R]7:30 PM Sydney – Australian markets eased after inflation jumped more than expected in the three months to September but still within the target range set by the central bank. The latest increase was driven by the introduction of carbon tax.[/R]

Australian markets closed lower after inflation in the quarter to September resurged and global worries weighed on the sentiment.

The ASX 200 index slipped 37.30 or 0.8% to 4,505.80 and the broader All Ordinaries dropped 37.39 to 4,530.57.

Australian dollar rebounded to $1.035 against the U.S. dollar after the release of inflation data and eased at close to $1.029.

Inflation in the quarter to September shot up to 1.4% from the previous quarter when prices increased 0.4%. The latest jump in inflation was driven by the introduction of carbon tax on July 1.

From a year ago, inflation rose 2% after rising at 1.2% in the annual period at the end of June.

In the quarter, electricity prices rose 15.3% as carbon tax was levied on energy costs and food prices increased 1.9%. Housing prices increased 3.2% and international travel costs jumped 6.6%.

Stock Movers

BHP Billiton Limited declined 48 cents to $34.31 and, Rio Tinto Limited dropped 56 to $57.26. Lynas Corporation Limited slid 0.5 cents to 68 cents and Iluka Resources slumped 25 cents to $9.95.

Fortescue Metals gained 4 cents to $4.25.

Mirabela Nickel slid 1 cent to 46 cents and Newcrest Mining plummeted 67 cents to $26.49. Kingsgate down 1 cent to $5.70 and Whitehaven Coal closed unchanged at $3.20.

Graincorp slipped 0.3% to $12.17 after the company confirmed that it received a preliminary bid of $2.7 billion from the U.S. based Archer Daniels Midland which controls 14.9% stake in the company.

Transfield Services lowered 1 cent to $1.64; engineering contractors WorleyParsons plunged $1.47 cents or 5.8% to $23.86 and Monadelphous Group declined 41 cents to $20.61.

Oil Search Limited slipped 7 cents to $7.53 and Santos Limited decreased 20 cents to $11.74 and Woodside Petroleum plummeted 57 cents to $34.95. Sundance Energy slid 1 cent to 81 cents.

Origin Energy Limited slipped 10 cents to $11.45.

Seven West Media closed unchanged at $1.24. Ten Network fell 2.5 cents to 28 cents after investors worried that the company may accept the lowered bid for its outdoor business.

Fairfax Media gained 3 cents to 41 cents after the company held its annual general meeting and its largest shareholder Gina Reinhart failed to block the latest pay package for executives.

News Corp, the controversial global entertainment group, declined 37 cents to $24.02.

Harvey Norman Holdings slid 2 cents to $1.97, Woolworths slipped 5 cents to $29.01 and Kathmandu closed unchanged at $1.50.

David Jones Limited lowered 2 cents to $2.60 and Wesfarmers decreased 14 cents to $34.60. Breville Group added 1 cent to $6.01. Billabong International Limited gained 0.5 cents to 86 cents.

Commonwealth Bank of Australia lowered 2 cents to $57.08 and Bank of Queensland decreased 3 cents to $7.47. ANZ slumped 11 cents to $25.60.

Macquarie Group plummeted 68 cents to $29.97 and Perpetual Limited dropped 9 cent to $27.77.

Toll Holdings decreased 11 cents to $4.22 and Leighton declined 65 cents to $18.18 and property developer Mirvac Group closed unchanged at $1.51.

Qantas slid 1 cent to $1.33, Flight Centre decreased 53 cents to $27.36 and Virgin Australia gained 1.5 cents to 46.5 cents.

QR National slipped 5 cents to $3.75 and Telstra slid 3 cents to $4.03.