Australia Holds Rates, Indexes Drop 1.7%

Marcus Jacob
04 Feb, 2014
New York City

Australian indexes dropped 1.7% following Asia-wide decline and Aussie dollar firmed up after the Reserve Bank left reference rate unchanged and guided stable rate environment in the near future. Resource and banking stocks led the market decline.

[R]4:30 PM Sydney – Australian indexes dropped 1.7% following Asia-wide decline and Aussie dollar firmed up after the Reserve Bank left reference rate unchanged and guided stable rate environment in the near future. Resource and banking stocks led the market decline.[/R]

Stocks in Australia plunged following Asia-wide decline after weaker than expected manufacturing data in the U.S. and overnight market declines in Europe.

Investors also sold stocks and lifted Aussie dollar after the central bank left its record low interest rate unchanged and in a note dropped comments about dollar being too high and guided stable interest rate.

The Reserve Bank of Australia kept cash rate unchanged at record low of 2.5%.

Australian dollar advanced to 88.83 U.S. cents and in stock market trading turnover climbed to 921 million shares worth $5.7 billion.

The ASX 200 index dropped 90.80 or 1.7% to 5,097.10 and the broader All Ordinaries slumped 87.80 to 5,114.10.

Stocks in Review

Rio Tinto fell $1.23 to $64.11. BHP declined 94 cents to $35.50. Woodside Petroleum Limited slipped 49 cents to $37.06.

Westpac decreased 59 cents to $30.40.

Challenger Diversified Property Group slipped 1.2% to $2.48 after the real estate developer reported revenue in the first-half ending in December fell 0.4% to $47.16 million from $47.34 million a year ago period.

Net profit for the period declined 27% to $15.17 million compared to $20.80 million and basic earnings per share increased to 11.1 cents from 10.7 cents a year ago.

REA Group Limited climbed 5% to $43.78 after the online real estate listing service operator stated revenue in the first-half ending in December surged 30% to $209.42 million from $161.43 million a year ago.

Net profit for the period jumped 37% to $70.70 million compared to $51.59 million and diluted earnings per share jumped to 53.7 cents from 39.2 cents a year ago.

Titan Energy Services Ltd dropped 2.9% to $2.38 after the oil and gas field service provider said revenue in the first-half ending in December soared 53% to $45.2 million from $29.6 million a year earlier.

Net profit for the period surged 117% to $5 million compared to $2.3 million and basic earnings per share climbed to 10.2 cents from 6.6 cents a year ago.