Australian Jobless Rate Drops to 6.1%, Stocks Face Headwinds

Marcus Jacob
15 Jan, 2015
New York City

Australian market indexes after a weak opening managed to trim losses after December jobless rate fell to 6.1%. Weak copper, iron ore and crude price continue to pressure resource sector jobs and investment plans.

[R]5:30 PM Sydney – Australian market indexes after a weak opening managed to trim losses after December jobless rate fell to 6.1%. Weak copper, iron ore and crude price continue to pressure resource sector jobs and investment plans.[/R]

Market indexes in Sydney trimmed losses after jobs report was ahead of expectations.

Stocks opened lower on the back of weak copper price and vanishing spread between two reference prices of oil prices sold in North America and Asia. However, market indexes pared back losses after December unemployment rate declined unexpectedly.

The Australian Bureau of Statistics reported seasonally adjusted unemployment rate in December unexpectedly declined to 6.1% from 6.2% in November.

In December, the Australian economy added 37,400 jobs to a total of 11,679,400 compared to 42,700 net jobs addition in November.

The seasonally adjusted number of people unemployed in December dropped by 16,200 to 759,200.

In a separate report, the department said seasonally adjusted the value of total building work done in the third quarter to September dropped 0.9% compared to 1.9% jump in the second-quarter.

The total number of completed new homes in the third quarter declined to 4.3% from previous quarter while total new other residential buildings in the quarter jumped 1.1% and total value of building work done surged 5.1%.

Australian dollar closed at 82.08 U.S. cents and in stock-trading turnover increased to 795 million shares worth $5.2 billion.

ASX 200 Index fell 22.20 or 0.4% to 5,331.40 and broader All Ordinaries Index slid 21.60 to 5,310.60.

In commodities trading, gold gained $2 to US$1,231 an ounce and light crude oil jumped US$2.45 to US$48.96 a barrel. Brent crude declined 47 cents to close at US$49.51 a barrel.

Australian Stock Movers

Djerriwarrh Investments Limited gained 0.9% to $4.67 after the investment company said total revenues in the first-half ending in December dropped 7.5% to $19.7 million from $21.3 million a year ago period.

Profit for the period declined 10.8% to $19.8 million compared to $22.2 million and earnings per share slumped to 9.06 cents from 10.15 cents in the same period a year ago.

Iluka Resources Limited dropped 2.6% to $6.29 after the zircon producer reported total mineral sands production dropped 14.7% to just over 900 tons from 1,055.6 tons while total mineral sands sales increased 1.2% to 932.8 tons from 921.9 tons a year ago period.

Oroton Group Limited tumbled 23.4% to $2.95 after the leather goods retailer announced underlying profit for the first-half to fall between $2.5 million and $3.5 million from $8 million in the same period a year ago.

However, sales have been on the rise in the last three months.

Woodside Petroleum Limited dropped 1.4% to $35.06 after the oil and gas producer reported revenues in the fourth-quarter ending in December climbed 6.9% to $1.76 billion from 1.65 billion a year ago period.

For the year, the company said revenue soared 22.5% to $7.08 billion compared to $5.78 billion a year ago.

The company said asset write-downs for the year are anticipated to be in the range of $250 million to $400 million pre-tax and revised its spending for this year after the plunge in crude prices.