Australian Indexes Participate in World Markets Rally

Marcus Jacob
04 Jul, 2014
New York City

Australian market indexes gained 1.5% at the end of week when Reserve Bank of Australia and European Central Bank left interest rates on hold. The latest market rally was supported by better than expected job gains in the U.S. Reef Casino was halted after ACCC launched competition investigation.

[R]5:00 PM Sydney – Australian market indexes gained 1.5% at the end of week when Reserve Bank of Australia and European Central Bank left interest rates on hold. The latest market rally was supported by better than expected job gains in the U.S. Reef Casino Trust was halted.[/R]

Australian stocks extended gains in the first week in July and benchmark index added 1.5% in the week when Australia and euro zone left interest rates on hold.

Market sentiment was bolstered further on Friday, after the U.S. reported better than expected monthly job gains in June and averaged more than 200,000 net new hires in the last five months.

The larger than expected gains in the job market lifted market indexes in New York and in the euro zone on the prospect of steadier recovery in the world’s largest economy and rising exports from the China, the largest trading partner of Australia.

Australian dollar slid to 93.65 U.S. cents and stock trading turnover declined to 662 million shares worth $3.81 billion.

ASX 200 index rose 33.80 or 0.6% to 5,525 and the broader All Ordinaries gained 32.30 to 5,511.80. For the week, ASX 200 gained 1.5%.

Stocks in Review

Abacus Property Group declined 3.9% to $2.48 after the property developer and its partner sold a property valued about $94 million in Melbourne.

M2 Group Limited gained 0.8% to $5.95 after the telecommunications services provider reported net organic growth in the second-half of 71,000 post-paid services and expected to report full year earnings at the mid-point of guidance.

The company experienced growth in all segments including fixed voice, broadband and energy services.

Reef Casino Trust was halted at $3.91 and the Australian Competition and Consumer Commission has launched an investigation to evaluate reduced competition from the proposed $217 million takeover of a Cairns casino in Queensland.

In November 2013, Aquis Casino and Hong Kong-based billionaire Tony Fung had proposed to develop a $4.2 billion resort and casino. However, the Aquis and Fung have told ACCC they do not plan to go ahead with the development unless the latest takeover bid for the second casino in the same town is approved.

The ACCC is scheduled to make its final decision on August 21.

Woodside Petroleum Limited gained 0.5% to $41.81 after the oil and gas producer plans to acquire 25% stake from Chariot Oil and Gas in Morocco for an undisclosed sum.