Weak Resource Stocks Lead Australian Indexes Lower, China Slowdown Weighs

Marcus Jacob
15 Apr, 2013
New York City

Resource sector stocks plunged after China reported a decline in economic growth and property and fixed-asset investment growth. Domestically, home loan growth increased for the first time in five months in February.

[R]6:30 PM Sydney – Resource sector stocks plunged after China reported a decline in economic growth and property and fixed-asset investment growth. Domestically, home loan growth increased for the first time in five months in February.[/R]

Stocks in Sydney opened lower and dropped to the lowest in the session around 2 p.m. after China reported weaker than expected economic data. Market indexes recovered in the late afternoon but still closed down for the day.

The ASX 200 index slipped 45.60 or 0.9% to 4,967.90 and the broader All Ordinaries declined 49.20 to 4,966.80.

Australian dollar closed up $1.044 and in stock trading, turnover decreased to 746 million shares worth $4.1 billion.

Australian home loans demand increased 2% in February to 45,423, according to the latest data released by the Australian Bureau of Statistics.

Total home loans increased 1.4% to $21.8 billion.

Chinese Economic Growth Slows

Chinese economic growth in the first quarter to March declined to 7.7% from the December quarter growth of 7.9% when the economy expanded after falling for seven quarters of decline.

For 2012, the economic growth eased to 7.8%, weakest since 1999 as the government clamps down on loan growth and engineers soft landing. China has targeted for the current year economic growth of 7.5% for the current year.

Retail sales growth in the quarter eased to 12.4% from 14.8% in the previous quarter and fixed-asset investment was unchanged at 20.9%. Industrial output increased at 9.5%, slower than 11.6% in the previous quarter.

And, the widely watched property investment growth declined 3.3 percentage points from the previous quarter growth rate to 20.2%.

Stock Movers

Miners led the decliners after China reported a decline in economic growth.

Rio Tinto was forced to shut down one of the largest copper mines in the world located in the U.S., Bingham Canyon Mine, after a massive landslide. The miner is schedule to report its production schedule later in the week.

Rio Tinto declined $1.81 to $55.09 and BHP dropped $1.04 to $32.31. Fortescue Metals Group plunged 25 cents or 6.2% to $3.76.

Woodside Petroleum slipped 40 cents to $36 and Santos fell 19 cents to $12.40.

Newcrest Mining plummeted $1.61 or 8.2% to $17.92, Kingsgate tumbled 53 cents or 15.2% to $2.96 and Whitehaven Coal slid 7 cents to $2.07.

David Jones Limited added 3 cents to $2.84 and Breville Group down 6 cents to $6.60. Billabong closed unchanged at 52 cents and Globe International closed unchanged at 41 cents.

Woolworths slumped 32 cents to $34.46. Kathmandu added 1 cent to $1.99.

Leighton’s subsidiary Thiess was selected for $125 million electrical system network work for the metropolitan Perth.

Toll Holdings slid 20 cents to $5.58, Leighton Holdings fell 11 cents to 19.41 and Mirvac Group gained 3 cents to $1.71. Lend Lease dropped 25 cents to $10.46.

Computershare Limited said it will invest $10 million to acquire 25% stake in the U.S. based InVeSHARE.

Westpac increased 7 cents to $31.59, Commonwealth rose 0.7% to $68.51 and National Australia Bank up 0.5% to $31.77 and ANZ added 8 cents to $28.79.

Macquarie Group declined $1.07 to $37.10 and Wesfarmers up 1 cent to $40.68.

Nufarm dropped 14 cents to $4.16. Linc Energy declined 8 cent or 4.2% to $1.96.