Australian Building Approvals Surge for the Second Month

Marcus Jacob
31 Jul, 2014
New York City

Australian stocks powered ahead on the stronger than expected building approvals. Iron ore prices remained weak but the U.S. Fed trimmed its monthly bond purchase program by $10 billion.

[R]5:00 PM Sydney, Australia – Australian stocks powered ahead on the stronger than expected building approvals. Iron ore prices remained weak but the U.S. Fed trimmed its monthly bond purchase program by $10 billion.[/R]

Australian stocks traded higher and iron ore prices weakened in international markets after the U.S. Fed cut its monthly bond buying program by $10 billion to $25 billion, sixth monthly cut in a row.

The Australian Bureau of Statistics reported export prices in the second-quarter plunged 7.9% followed by downwardly revised 2.8% increase in the first-quarter.

Import prices dropped 3% in the quarter after 3.2% increase in first-quarter. On a yearly basis, export prices slipped 1.9% while import prices climbed 5.7%.

A separate report from the department said total number of building approvals issued in June climbed a seasonally adjusted 16% to 15,659 in June from a year ago month and followed upwardly revised15.2% surge in May.

Australian dollar closed at 93.21 U.S. cents and stock trading turnover gained to 715 million shares worth $4.38 billion.

ASX 200 index edged up 10 or 0.2% to 5,632.90 and the broader All Ordinaries gained 8 to 5,623.10. For the month, ASX 200 soared 4.7%.

Stocks in Review

Rio Tinto Limited gained 0.5% to $66.38 after the metal and mineral explorer agreed to sell its Mozambique coal assets to an Indian investment group International Coal Ventures Ltd, a joint venture of Steel Authority of India for $50 million to cut the debt.

Rio Tinto had bought the assets through acquisition of Riversdale Mining Limited in 2011 for US$4 billion and write-down US$3.5 billion of the purchase price leading to the ouster of chief executive Tom Alabanese to ""step down"".

The transaction is expected to close in the third quarter of this year.

Sunland Group Limited gained 1.2% to $1.65 after the property developer agreed to acquire 4.7 hectare site in Palm Beach on the Gold Coast for $18.7 million.

Woodside Petroleum Limited fell 0.8% to $42.52 after the oil and gas producer is planning to buy back shares from Royal Dutch Shell worth $2.68 billion.