Australian Markets Flat, Business Conditions Index Weaken to 15-Year Low

Marcus Jacob
22 Jan, 2013
New York City

Australian market index ASX 200 surged after the Bank of Japan announcement but failed to close in positive territory. Investor confidence to invest stayed near a 15-year low on high dollar and weak business conditions. NAB declined after Santander denied reports of its interest in buying UK assets.

[R]6:30 PM Sydney – Australian market index ASX 200 surged after the Bank of Japan announcement but failed to close in positive territory. Investor confidence to invest stayed near a 15-year low on high dollar and weak business conditions. NAB declined after Santander denied reports of its interest in buying UK assets.[/R]

Markets in Asia and in Australia reacted with skepticism after the Bank of Japan revised its inflation target to 2% and said it plans to buy unlimited assets from 2014.

The move widely expected also surprised the market after the central bank said it will purchase unlimited amount of assets.

Bank of Japan is under pressure from the newly elected government to fight deflation but also raise the prospect of runway inflation that could wipe out the savings of most Japanese.

The ASX 200 index rose 1.60 to 4,779.10 and the broader All Ordinaries edged up 0.71 to 4,802.91.

The Australian dollar declined and closed at $1.0563.

The Australian Chamber of Commerce and Industry survey showed investor confidence declined on high dollar and weak business condition.

The latest survey showed that business conditions index increased to 49.2 in December quarter from 48 in the previous quarter. Conditions expectations are expected to worsen to 46.2 in the March quarter.

Stock Movers

BHP Billiton Limited gained 4 cents to $36.58 and Rio Tinto Limited jumped 44 to $66.89. Fortescue Metals increased 11 cent $4.64.

Newcrest Mining slid 4 cents to $23.21. Kingsgate slumped 15 cents to $4.91 and Whitehaven Coal closed unchanged at $3.57.

Transfield Services plunged 11 cents or 5.8% to $1.80 and engineering contractor WorleyParsons slid 9 cents to $24.14. Monadelphous Group jumped 50 cents to $24.80 and Downer EDI gained 4 cents to $4.42.

Lend Lease increased 7 cents to $10.04.

Oil Search Limited down 4 cents to $7.10 and Santos Limited rose 1 cent to $11.75.

Woodside Petroleum gained 5 cents to $35.36 and Origin Energy Limited slid 2 cents to $12.11.

Woolworths climbed 33 cents to $31.25 and Kathmandu gained 3 cents to $1.71.

David Jones Limited rose 1 cent to $2.38 and Wesfarmers added 4 cents to $37.76. Breville Group gained 3 cents to $6.47.

Billabong closed unchanged at $1.

Commonwealth Bank of Australia jumped 34 cents to $62.54 and Bank of Queensland slid 1 cent to $7.98 and ANZ down 3 cents to $25.66. National Australia Bank slumped 26 cents to $26.59. Westpac rose 1 cent to $26.49.

Toll Holdings slid 1 cent to $4.94, Leighton up 3 cents to $19.13 and property developer Mirvac Group down 1 cent to $1.54.

Westfield Group decreased 7 cents to $10.86.