Australian Mortgage Rates Drop to Historic Low

Marcus Jacob
23 Jul, 2014
New York City

Stocks in Australia gained and three largest banks dropped fixed rate mortgage rates to historic lows. Inflation in second quarter jumped but the annual rate stayed within the target range established by the central bank. BHP reported production report that matched expectations.

[R]5:00 PM Sydney, Australia – Stocks in Australia gained and three largest banks dropped fixed rate mortgage rates to historic lows. Inflation in second quarter jumped but the annual rate stayed within the target range established by the central bank. BHP reported production report that matched expectations.[/R]

Market indexes in Australia advanced and surpassed the previous high in June 2008 but still traded 19% below November 2007 peak.

Three largest Australian banks lowered mortgage rates to a historic low below 5% on long term mortgages.

The Commonwealth Bank, National Australia Bank and Westpac lowered fixed rates on mortgage loans to 4.99%.

Mortgage rates are dictated by reference rates set by Reserve Bank of Australia and rates are at historic low of 2.5% for almost a year.

The Australia Bureau of Statistics reported consumer price index in second-quarter ending in June jumped 0.5% and yearly inflation rose to 3%.

Australian dollar closed at 94.32 U.S. cents and stock trading turnover gained to 700 million shares worth $4.6 billion.

ASX 200 index gained 33.40 or 0.6% to 5,576.70 and the broader All Ordinaries increased 33 to 5,567.

Stocks in Review

BHP Billiton Limited gained 1.2% to $38.98 after the diversified natural resources producer said production in the fourth-quarter climbed 19% from a year ago quarter and 15% from the previous quarter.

Production of metallurgical coal jumped 9% to 11.89 million tons and total iron ore production for the year surged 20% to a record 203.56 million tons from a year ago. Energy coal production slid 1% to 18.36 million tons from the previous quarter while for the year rose 1% to 73.49 million tons.

Total petroleum production for the fourth quarter increased 9% to 64.7 million barrels of oil equivalent from the year-ago period.

Petsec Energy Limited surged 7.7% to 14 cents after the oil and gas explorer said net oil and gas revenues in the second-quarter ending in June declined 19% to US$3.2 million from US$3.9 million a year ago.

The company added cash at the end of the quarter of US$28.2 million and no debt.

Sims Metal Management Ltd surged 5.7% to $10.85 after the ferrous metal recycler brought out a five-year strategic plan to lift its operating earnings by three-fold.