Australian Index Drops 1%; Retail Sales Accelerate, Trade Deficit Narrows

Marcus Jacob
03 Jul, 2015
New York City

Australian market indexes dropped 1% after markets in China turned volatile and mood was tense in the euro zone ahead of Greece referendum. Retail sales growth accelerated at the fastest pace in three months and trade deficit narrowed in May to A$2.75 billion.

[R]5:30 PM Sydney – Australian market indexes dropped 1% after markets in China turned volatile and mood was tense in the euro zone ahead of Greece referendum. Retail sales growth accelerated at the fastest pace in three months and trade deficit narrowed in May.[/R]

Australian market indexes lost more than 1% and for the week were nearly unchanged.

Nervous investors overlooked the domestic retail sales and international trade data and focused on the uncertainty in the euro zone.

The seasonally adjusted total value of retail sales in May increased 0.3% to $24.15 billion from downwardly revised 0.1% decrease in April but 0.2% rise in March., the Australian Bureau of Statistics said.

In May, export increased 1% to $25.53 billion from $25.32 billion in April while import in the month dropped 4% to $28.28 billion compared to $29.46 billion in April.

Australian dollar closed at 75.84 U.S. cents and in stock trading turnover dropped to 725 million shares worth $4.5 billion.

At close, the ASX 200 Index slumped 61.50 or 1.1% to 5,538.30 and the broader All Ordinaries Index decreased 59.90 to 5,528.

In commodities trading, gold added US$3 to US$1,168 an ounce and Brent crude slid 0.16 to close at US$61.91 a barrel.

IPO

Argo Global Listed Infrastructure Limited fell 1.7% to $1.97 after the investment company priced its stock at $2.

The stock opened at $1.99 and closed at $1.97.

Murray Goulburn Unit Trust soared 6.7% to $2.24 after the dairy and nutritional products maker priced its stock at $2.10.

The stock opened at $2.18 and closed at $2.24.

Australian Stock Movers

Affinity Education Group Ltd surged 29.6% to 70 cents after the educational services provider’s board rejected a takeover offer and said the approach is “unsolicited” and “highly opportunistic” and the “proposal highly conditional.”

The company advised shareholders to take no action” in relation to the takeover offer from G8.

Qantas Airways Limited dropped 2.1% to $3.20 after the airline company said it will pay one-time bonus payments of about $70 million to all staff members including Jetstar and other groups who were covered under 18 month wage freeze policy.

Qantas estimated to realise at least $875 million of the targeted $2 billion of benefits in the Qantas Transformation program as of the end of fiscal 2015.

Separately the Jetstar Airlines a unit of Qantas Airways cancelled several flights to Bali''s Denpasar airport because volcanic ash cloud drifting toward the airport.

Western Areas Ltd declined 3.9% to $3.16 after the nickel producer offered debt free convertible bonds on full repayment of $125 million and will be repaid from the existing cash reserves.

The company arranged a finance facility with ANZ Bank of up to $125 million.