Australia Extends Weekly Surge to 3.7%, Aussie Dollat at New 6-year Low

Marcus Jacob
23 Jan, 2015
New York City

Australian dollar traded at a new five-year low and energy and mining companies led the advance in Sydney. Australian market indexes extended weekly gains following world markets after European Central Bank announced historic one trillion euro bond purchase plan.

[R]5:30 PM Sydney – Australian dollar traded at a new five-year low and energy and mining companies led the advance in Sydney. Australian market indexes extended weekly gains following world markets after European Central Bank announced historic one trillion euro bond purchase plan.[/R]

Australian market indexes extended weekly surge after European Central Bank followed through its promise of printing more money and provide monetary stimulus through a bond buying program of 60 billion euros a month till September 2016.

The unprecedented bond purchase program will be coordinated by the European Central Bank with national central banks in the euro zone and will limit the bond purchase for each country to 33% of outstanding bonds.

The move will pump additional liquidity in the financial system which is hoped to lead to higher lending and spur investment in the stagnating economies of the euro zone.

The euro closed at a new 10-year low against the dollar and dropped 0.7% to $1.145 and bond yield of many nations in the euro zone dropped to record lows. Italian and Spanish bond yields, which only four years ago traded between 3% and 4%, dropped to new lows of 1.4% and 1.5% respectively.

Australian dollar closed at 79.80 U.S. cents and in stock-trading turnover dropped to 705 million shares worth $4.44 billion.

ASX 200 Index jumped 81.90 or 1.5% to 5,501.80 and broader All Ordinaries Index rose 77.70 to 5,468.20.

For the week, ASX 200 climbed 3.7%.

In commodities trading, gold gained US$4 at US$1,297 an ounce and light crude oil fell US$1.47 to US$46.37 a barrel. Brent crude increased 78 cents to close at US$49.30 a barrel.

Australian Stock Movers

Reject Shop Ltd fell 0.3% to $5.99 after the general merchandise retailer said sales in the first-half ending in December jumped 4.4% to $402.2 million and comparable store sales dropped 3.3% following 5.4% decrease in first-quarter and 1.7% in second-quarter.

The retailer said EBITDA for the period declined 12.9% or in the range of $28.5 million to $29 million.

The company forecasted net profit for the period between $12.7 million and $13 million.

Santos Ltd soared 5.1% to $7.80 after the oil and gas producer reported revenues increased 2% to $1.09 billion from $1.06 billion

Santos said production in the fourth-quarter climbed 15% to 15.1 million barrels of oil equivalent compared to 13.1 64 million barrels of oil equivalent from a year ago period.

For the year, production jumped 6% to 54.1 million barrels of oil equivalent from a year ago and revenues to climbed 12% to $4.04 billion from $3.60 billion a year earlier.

The company forecasted production for the fiscal 2015 to be in the range of 57 million barrels of oil equivalent to 64 million barrels.

Tox Free Solutions Limited gained 0.8% to $2.60 after the industrial and waste management services provider lifted its underlying EBITDA for the first-half of about $37 million, higher than the earlier estimate between $32 million and $34 million at annual general meeting in November.