China Weakness Drags Australian Stocks, Macquarie Lifts Outlook

Marcus Jacob
24 Mar, 2014
New York City

Australian stocks traded lower after a private survey in China indicated larger than expected weakness in manufacturing sector. G8 Education Limited acquired Sterling Early Education for $228 million. Macquarie Group Limited lifted its annual earnings outlook.

[R]5:00 PM Sydney – Australian stocks traded lower after a private survey in China indicated larger than expected weakness in manufacturing sector. G8 Education Limited acquired Sterling Early Education for $228 million. Macquarie Group Limited lifted its annual earnings outlook.[/R]

Australian stocks traded down in most of the session after a private survey showed a larger than expected weakness in manufacturing sector in China.

The HSBC China Purchasing Managers Index for March showed fell to an eight month low of 48.1 from 48.5 in February. The preliminary data will be revised in two weeks and any reading below 50 indicates a contraction.

Australian dollar closed at 90.64 U.S. cents and stock market trading turnover slid to 639 million shares worth $3.7 billion.

The ASX 200 index rose 8.80 to 5,346.90 and the broader All Ordinaries gained 8.10 to 5,362.10.

Stocks in Review

Rio Tinto added 13 cents to $61.50. BHP rose 16 cents to $35.74. Woodside Petroleum Limited increased 21 to $38.64.

Westpac Banking Corp gained 2 cents to $33.62.

AGL Energy Ltd rose 0.9% to $15.13 after the gas and electricity supplier took legal steps to pursue $1.5 billion acquisition of power supplier Macquarie Generation after its plans was scuttled by the Australian competition regulators even after the company revised the offer higher.

Kathmandu Holdings Ltd surged 11.3% to $3.45 after the apparels retailer reported sales in the first-half rose 1% to NZ$167.6 million from NZ$165.9 a year ago.

Net profit in the period climbed 10.7% to NZ$11.4 million compared to NZ$10.3 million a year earlier.

The retailer added same-store sales in the first-half jumped 5.4%.

Leighton Holdings Limited fell 0.7% to $20.90 after the construction company secured a $1.7 billion contract as part of a joint venture to deliver New Orbital Highway Project in Qatar.

Macquarie Group Ltd jumped 2.9% to $56.42 after the Australia-based investment bank estimated its full-year profit to rise between 40% and 45% from a year ago to $1.23 billion.

The investment bank said its fixed-income, currencies and commodities unit is expected to deliver slightly better than earnings compared to a year ago.

G8 Education Limited last traded at $4.76 before a trading halt after the company said its acquisition of Sterling Early Education and 92 childcare and education centers from other operators will increase its number of centers by 28%.

The stock is expected to resume trading on Wednesday.

The childcare center operator said its operating earnings in fiscal 2015 is expected to reach $39.4 million and the company will be operating 388 centers in Australia by then.