Australian Loan Approvals and Auto Sales Rise

Marcus Jacob
15 Jan, 2014
New York City

Australian stocks rebounded but trading volume was weak. Loan approvals in November increased 5.5% in Australia and care sales advanced 1.7% in December. Fortescue Metals said it plans to repay its $1.6 billion short term debt ahead of schedule before March.

[R]4:30 PM Sydney – Australian stocks rebounded but trading volume was weak. Loan approvals in November increased 5.5% in Australia and care sales advanced 1.7% in December. Fortescue Metals said it plans to repay its $1.6 billion short term debt ahead of schedule before March.[/R]

Australian stocks managed to rebound after sustained selloff in the week, however trading was weak.

World Bank lifted its global growth estimated in the current year to 3.2% from its previous estimate of 3%. The multilateral agency estimated economic growth of 2.4% in 2013.

The bank also said for the first time in five years high income economies are showing early signs of sustained economic expansion.

The Australian Bureau of Statistics said finance commitments for residential housing grew 1.9% and commercial finance climbed 8.3% in November.

In the month, commitment for personal finance rose 0.6% and for lease finance increased 1.9%.

The statistics agency added new car sales jumped 1.7% in December following 2.1% rise in November.

Australian dollar eased to 89.16 U.S. cents and in stock market turnover slipped to 656 million shares worth $3.5 billion.

The ASX 200 index gained 33.40 or 0.6% to close at 5,245.40 and the broader All Ordinaries gained 35.70 to 5,255.50.

Stocks in Review

Rio Tinto jumped 89 cents to $64.24. BHP fell 21 cents to $35.93. Woodside Petroleum Limited gained 28 cents to $37.63.

Banks were in focus after Fitch Ratings issued a cautionary note on Australian banking sector and said four largest banks’ profit will increase modestly in the current year.

The rating agency also said banks are increasingly vulnerable to a slowdown in resource sector originating in a downturn in China’s infrastructure development.

Westpac increased 20 cents to $31.71 and Commonwealth Bank of Australia added 34 cents to $76.19.

Fortescue Metals Group Limited jumped 3.5% to $5.33 after the iron ore producer said it will repay $1.64 billion before maturity of two-year senior unsecured notes to lower the debt to $7.8 billion from $10.53 billion and gross debt will reduce to $9.6 billion by the end of March.

Macquarie Group Ltd gained 1.3% to $53.11 after the investment bank was reported to be short-listed for JPMorgan Chase''s commodities business including global metal warehouse network, energy supply agreements and power plants for $2.21 billion.

The news was first reported by CNBC and later confirmed by Ticker.com through independent sources in Sydney and in New York.

OZ Minerals Limited surged 14% to $3.50 after the gold miner met its forecasts for full-year gold and copper production and said it will increase production of copper to between 75,000 tons and 80,000 tons and gold in the range of 130,000 ounces to 140,000 ounces in this year.

Qantas Airways Limited closed unchanged at $1.10 after the airline company lifted the fuel surcharge on flights from Australia to Europe, to most destinations in Asia and the Middle East for the first-time since July 2013.