Australian Index Drops 1.2%, Unemployment Steady at 5.4%

Marcus Jacob
14 Mar, 2013
New York City

Australian stocks fell sharply on the rising worries that iron prices may dip to new lows and banks are trading ahead of fundamentals. Iron ore prices declined to $139 a ton. Aurizon, freight railroad operator secured a coal transportation contract with Xstrata.

[R]6:30 PM Sydney – Australian stocks fell sharply on the rising worries that iron prices may dip to new lows and banks are trading ahead of fundamentals. Iron ore prices declined to $139 a ton. Aurizon, freight railroad operator secured a coal transportation contract with Xstrata.[/R]

Australian stocks fell sharply on Thursday after investors sold resource sector stocks and banks.

Iron ore prices declined for the second week in a row and spot price fell to $139 a ton and traders are expecting the price to ease to below $120.

Banks declined on the worries that the recent market advance has lifted the valuation ahead of industry fundamentals.

Jobs Gains Exceed Expectations

Australian employers added 71,500 net new jobs in February and labor participation rate increased.

According to the data released by the Australian Bureau of Statistics, full-time jobs increased 17,800 and part-time jobs climbed 53,700.

Jobless rate held steady at 5.4% for the third month in a row and economists had estimated new jobs gains of only 10,000.

Regionally employment picture differed based on the local economic conditions.

The unemployment rate in Western Australia increased 0.4 percentage points to 4.5% and in NSW gained a fraction to 5.2%.

In Victoria, unemployment declined to 5.5% from 6.1% and in Queensland rate increased 0.3 percentage point to 5.8%.

The ASX 200 index declined 60.20 or 1.2% to 5,032.20 and the broader All Ordinaries slumped 60.63 or 1.2% to 5,043.77.

Australian dollar rose to a one-month high and closed at $1.0356.

Stock Movers

The department store operator Myer soared 5.5% to $3.07 after the company reported better than expected six month net profit of $88 million.

Aurizon added 0.8% to $4 after the railroad operator secured a coal transportation contract with Xstrata.

Rio Tinto declined $1.40 to $60.70 and BHP fell 82 cents to $35.09. Fortescue Metals Group plunged 26 cents or 6.2% to $3.97.

Woodside Petroleum slipped 53 cents to $36.24 and Santos slid 19 cents to $12.93.

Newcrest Mining dropped 45 cents to $21.85. Kingsgate slumped 7 cents to $3.94 and Whitehaven Coal declined 7 cents to $2.31.

David Jones Limited closed unchanged at $2.97 and Breville Group declined 24 cents or 4.3% to $5.37. Billabong slipped 1.5 cents to 83.5 cents.

Woolworths decreased 15 cents to $35.12. Kathmandu closed unchanged at $1.92.

Toll Holdings dropped 21 cents to $5.78, Leighton declined 46 cents to $21.69 and Mirvac Group slid 2 cents to $1.63. Lend Lease slipped 18 cents to $10.02.

Westpac decreased 37 cents to $30.13, Commonwealth fell 0.7% to $68.88 and National Australia Bank slid 0.8% to $30.69 and ANZ slipped 1% to $28.18.

Macquarie Group declined 97 cents to $37.43 and Wesfarmers lowered 41 cent to $42.08.