Low Rate Outlook in Australia, Federal Budget on Tuesday

Marcus Jacob
09 May, 2014
New York City

Australian markets indexes turned lower and trading volume dipped near the low of the year. Reserve Bank of Australia held out for low interest rate in its quarterly policy statement. Federal government is scheduled to release its annual financial budget on Tuesday.

[R]5:00 PM Sydney – Australian markets indexes turned lower and trading volume dipped near the low of the year. Reserve Bank of Australia held out for low interest rate in its quarterly policy statement. Federal government is scheduled to release its annual financial budget on Tuesday.[/R]

Australian indexes closed down 0.3% today and were steady in the week and the focus was on the Reserve Bank of Australia and government budget.

Reserve Bank of Australia in its quarterly monetary policy statement released today suggested low interest rates in the near future.

The central bank this week left its reference rate to a record low for the eighth time in a row. And, investors looked ahead to the release of federal government scheduled to be released on Tuesday evening.

Australian dollar closed higher at 93.60 U.S. cents and stock market trading turnover slipped to 639 million shares worth $3.52 billion.

The ASX 200 index slid 16 or 0.3% to 5,460.80 and the broader All Ordinaries fell 13.90 to 5,455.90. For the week, ASX 200 closed nearly unchanged.

Resource stocks moved lower on the rising speculation that China may lower its interest rate after the second largest economy reported weaker than expected inflation for April month.

Separately, India reported its April month trade deficit edged lower to $10.1 billion and exports and imports eased from March but advanced from a year ago month.

With more than $25 billion in exports, India has surpassed Switzerland and is scheduled to pass by Italy and France in the next two years.

Stocks in Review

Rio Tinto slipped 51 cents to $60.95. BHP fell 31 cents to $37.34. Woodside Petroleum Limited rose 0.1% to $41.25.

Westpac Banking Corp added 4 cents to $34.94.

Fairfax Media Limited gained 2.5% to $1 after the media company reported total revenue in the in the first-half ending in March climbed 3.5% to $68.6 million compared to $66.3 million a year ago period.

The digital segment revenue in the period surged 44% while revenue from the print business declined 16%. Advertising print revenue plunged 29.9% to $20.2 million while advertising digital business revenue climbed 29.1% to $48.4 million.

Fairfax Media added domain digital listings segment revenue jumped to 40% and EBITDA in the period soared at 33%.

JB Hi-Fi Limited climbed 2.8% to $19.47 after the home consumer products retailer forecasted total sales in the third-quarter ending in March jumped 3% and expects total sales to climb between 6% and 8% from a year ago.

At an industry conference organized by Macquarie Australia, the retailer said it plans to open 182 stores across Australia and New Zealand by the end of this fiscal year.

In a separate release the company said it plans to spend $27.2 million under share buy-back program.

News Corporation jumped 3% to $18.29 after the diversified media and information service provider reported revenue in the third-quarter ending in March dropped 5% to $2.08 billion from $2.18 billion a year ago.

Net income in the quarter tumbled 85.1% to $48 million compared to $323 million and diluted earnings per share dropped to 8 cents from 56 cents a year earlier.

The media company said revenues from Australian newspapers business declined 21%. Revenues from the news and information services slipped by 9%.

Overall circulation and subscription segment revenue slumped 5.4%. Book publishing revenue in the quarter jumped 14% while revenue from the cable networking programming declined at 10%.