Subdued Economic Growth in Australia

Marcus Jacob
04 Mar, 2015
New York City

Australian economic growth was subdued in the final quarter of 2014 as terms of trade worsened. Aussie dollar gained and stock trading turnover was above $5 billion. QBE and Rio Tinto traded ex-dividend.

[R]5:30 PM Sydney – Australian economic growth was subdued in the final quarter of 2014 as terms of trade worsened. Aussie dollar gained and stock trading turnover was above $5 billion. QBE and Rio Tinto traded ex-dividend.[/R]

Stocks in Australia traded lower after the latest economic growth estimate showed a smaller than expected increase in the fourth-quarter.

Stocks lacked direction in the early trading after QBE and Rio Tinto traded ex-dividend.

Seasonally adjusted gross domestic product in the fourth-quarter jumped 0.5% from the previous quarter compared to 0.4% increase in the third-quarter.

Annual rate of expansion in the fourth-quarter declined to 2.5% from 2.7% in the previous quarter, according to the data released by the statistics agency.

The terms of trade decreased 1.7%, and real gross domestic income increased 0.2%, the Australian Bureau of Statistics said today.

Australian dollar closed at 78.15 U.S. cents and in stock trading turnover dropped to 756 million shares worth $5.1 billion.

ASX 200 Index slipped 32.30 or 0.4% to 5,901.60 and broader All Ordinaries Index fell 31.40 to 5,871.50.

In commodities trading, gold slid US$1 to US$1,208 an ounce and light crude oil increased 93 cents to US$50.52 a barrel.

Brent crude decreased 23 cents to close at US$60.79 a barrel.

Australian Stock Movers

Australian Pharmaceutical Industries Ltd jumped 2.8% to $1.27 after the beauty and health products retailer forecasted net profit to surge 30% for the first-half ending on February 28 to $21 million and underlying profit to jump to $16.2 million.

Computershare Limited rose 0.5% to $12.81 after the communications software service provider signed an agreement to acquire Valiant Trust Company from Canada-based Canadian Western Bank for about $33.9 million.

FlexiGroup Limited climbed 4.3% to $3.65 after the financial services provider agreed to acquire New Zealand-based information technology and telecom equipment provider Telecom Rentals for $102.34 million.

The company also forecasted net profit for the year in the range of $90 million to $91 million.

Insurance Australia Group Ltd rose 0.7% to $5.80 and the property and casualty insurer faces claims of $90 million related to Tropical Cyclone Marcia that hit central Queensland on February 20.

Sedgman Limited soared 4.8% to 77 cents after the engineering service provider secured contract worth $18.5 million from Twin Pines Minerals to design and build a mineral sands processing plant in the U.S. with completion scheduled by April, 2016.