Australian Indexes at 22-Month High, RBA Lowers Growth Estimate

Marcus Jacob
08 Feb, 2013
New York City

Australian stocks closed at a 22-month high after investors reacted to positive international trade data from China. Reserve Bank of Australia lowered its economic growth rate for 2013 and estimated inflation to be within its target range.

[R]6:30 PM Sydney – Australian stocks closed at a 22-month high after investors reacted to positive international trade data from China. Reserve Bank of Australia lowered its economic growth rate for 2013 and estimated inflation to be within its target range.[/R]

Australian stocks closed higher after China reported better than expected trade data and the Reserve Bank lowered its estimate of economic growth in the current year.

The RBA lowered its GDP forecast to a range of 2% to 3% from its previous estimate between 2.25% and 3.25%. For the current year, the central bank estimated growth of 3.5%.

In an accompanying statement, the RBA noted in the last six months the coal sector has reported the largest decline in investment as coal prices remain lower than a year ago despite the recent run up in prices.

The statement also noted that the housing market has recovered from its weakness in the last two years but the consumer demand remains weak.

Target for inflation in the current year is between 2% and 3% and the central bank estimated inflation in 2012 of 2.2%.

The ASX 200 index climbed 35.60 or 0.7% to 4,935 and the broader All Ordinaries jumped 33.63 to 4,989.40. For the week, the ASX 200 index gained 1%

The Australian dollar declined and closed at $1.033 and continued its slide for the third week in a row.

In stock trading, turnover was 1.66 billion shares worth $4.56 billion and 542 shares increased, 435 declined and 435 closed unchanged.

Stock Movers

Newcrest closed up 5% and gained as much as 10% after the gold miner reported decline in sales and profit, but lower than expected.

Sales in the first-half declined 23% to $1.81 billion and cash cost fell 6% to $973 an ounce. Net income declined to $320 million in the period compared to $659 million a year ago period. In the six months, Newcrest produced 953,331 ounces, 18% lower from a year ago.

The company estimated on the low of the range of 2.3 million ounces to 2.5 million ounces for the full year of gold production and maintained its interim dividend of 12 cents a share.

AGL Energy declined 19 cents to $15.13 after it suspended the coal steam gas operations on resistance from a community in southwest Sydney.

Rio Tinto gained 92 cents to $69.60 and BHP increased 30 cents to $37.95 and the company met with workers in Adelaide and announced job losses to trim costs.

Sundance Resources dropped 12% to 30 cents after the company faced another hurdle in completing its long delayed merger with China based Hanlong.

Lend Lease increased 14 cents to $10.34.

Oil Search Limited added 7 cents to $7.63 and Santos Limited gained 14 cents to $12.28. Beach Energy closed unchanged at $1.35.

Woodside Petroleum climbed 62 cents to $35.80 and Origin Energy Limited fell 7 cents to $12.27.

Woolworths closed unchanged at $32.75. Kathmandu fell 2 cents to $1.80 and Wesfarmers gained 12 cents to $38.63.

David Jones Limited added 1 cent to $2.63 and. Breville Group lowered 4 cents to $6.86.

Billabong slid 2 cents to 96.5 cents and Globe International closed unchanged at 45 cents.

Commonwealth Bank of Australia up 13 cents to $64.83 and Bank of Queensland added 2 cents to $8.60 and ANZ climbed 61 cents to $28.12. National Australia Bank gained 39 cents to $29.02. Westpac added 12 cents to $28.08.

Macquarie Group increased 28 cents to 37.78 and Toll Holdings rose 7 cents to $5.33, Leighton slid 5 cents to $20.30 and property developer Mirvac Group up 3 cents to $1.60.

Westfield Group slumped 24 cents to $11.05 and Pharmaxis closed unchanged at 66 cents.

Telstra down 2 cents to $4.62 after the telecom operator reported first-half net profit jumped 8.8% on the rising revenues in its mobile telecom business.