Australian Economic Growth Falls to 0.5%

Marcus Jacob
05 Dec, 2012
New York City

Australian economic growth in September quarter declined to 0.5% after household consumption and housing investment growth fell. Banks passed on full 25 basis points decline in rates to consumers.

[R]7:30 PM Sydney – Australian economic growth in September quarter declined to 0.5% after household consumption and housing investment growth fell. Banks passed on full 25 basis points decline in rates to consumers.[/R]

Stocks in Sydney closed higher but big banks led the decliners.

Banks passed on the full 25 basis point cut to customers after the Reserve Bank of Australia lowered its key lending rate to 3%, record low.

Separately, Australian Bureau of Statistics reported September quarter growth declined to 0.5% from the previous quarter increase of 0.6%.

For the year to September, economy expanded at 3.1%, slower than the 3.7% fall in the year to June.

Household consumption expenditure increase declined to 0.3% and investment in housing fell to an increase of 0.7%. Total gross capital formation increased to 0.4%.

In addition, Treasurer Wayne Swan said at a press conference today that the government is still committed to returning to a budget surplus in the current fiscal year. But he also stressed that the task will be harder with the recent decline in economic activities.

The ASX 200 index added 16.80 or 0.4% to 4,520.4 and the broader All Ordinaries decreased 28.20 or 0.6% to 4,511.8.

Australian dollar inched higher to $1.0463.

Stock Movers

BHP Billiton Limited increased 3 cents to $34.29 and Rio Tinto Limited jumped 94 cents to $59.35.

Mirabela Nickel decreased 0.5 cent to 42.5 cents and Newcrest Mining declined 26 cents to $24.54. Kingsgate Consolidated closed unchanged at $4.69 and Whitehaven Coal added 1 cent to $3.02.

Discovery Metals gained 3 cents to $1.61 on a speculation that a hostile offer from China based company may be successful at $1.70 a share or $824 million.

Sundance Resources plunged 12% to 34.5 cents after the company said the takeover by Hanlong Group will be delayed after the deadline January 8. Hanlong is still working to arrange the financing.

Transfield Services closed up 1 cent at $1.70 and engineering contractors WorleyParsons Limited fell 3 cents to $24.19.

Monadelphous Group added 12 cent to $21.58.

Oil Search Limited gained 18 cents to $7.13 and Santos Limited decreased 11 cents to $10.95.

Woodside Petroleum rose 21 cents to $34.29 and Origin Energy Limited increased 4 cents to $11.21.

Seven West Media rose 1 cent to $1.62 and Harvey Norman Holdings declined 1 cent $1.78.

Ten Network requested a trading halt ahead of an announcement to raise capital as the company struggles with poor programming and fleeting advertisers.

Woolworths increased 11 cents to $29.43 and Kathmandu closed unchanged at $1.45.

David Jones Limited increased 5 cents to $2.50 and Wesfarmers added 13 cents to $35.74. Breville Group gained 13 cents $6.

Billabong International Limited fell 0.01 cent to 86.5 cents.

Commonwealth Bank of Australia increased 58 cents to $61.08 and Bank of Queensland decreased 4 cent to $6.96 and ANZ Banking Group added 18 cents to $24.77.

National Australia Bank added 6 cents to $24.31. Westpac increased 16 cents to $25.58.

Toll Holdings decreased 1 cent to $4.56, Leighton rose 7 cents to $17 and property developer Mirvac Group increased 1 cent to $1.49.