Australian Indexes Drop 1%, Corporate Profits Fall 1.9%

Marcus Jacob
31 Aug, 2015
New York City

Australian market indexes dropped more than 1% and investors focused on the possibility of the first U.S. rate hike in more than a decade as early as next months. Australian corporate gross profits declined 1.9% in the June quarter. Infigen Energy, wind farm operator, reported widening loss.

[R]5:30 PM Sydney, Australia – Australian market indexes dropped more than 1% and investors focused on the possibility of the first U.S. rate hike in more than a decade as early as next months. Australian corporate gross profits declined 1.9% in the June quarter. Infigen Energy, wind farm operator, reported widening loss.[/R]

Market indexes in Sydney closed down and banks led decliners after investors focused on the possible rate hike in the U.S. in the next few weeks. In addition, credit downgrade at Woolworths also weighed on the market sentiment.

Sales on manufacturing goods in second-quarter slipped 0.5% from the previous quarter and declined 5.8% from a year ago period, the Australian Bureau of Statistics said today.

The seasonally adjusted wholesale trade sales of goods and services decreased 0.4% compared to 1.6% increase in a year ago period.

The seasonally adjusted company gross operating profits in the quarter slumped 1.9% followed by 0.3% contraction in the three months prior and dropped 3.9% in the same period a year ago.

Australian dollar closed at 71.54 U.S. cents and in stock trading turnover rose to 1.05 million shares worth $5.8 billion.

At close, the ASX 200 Index slipped 56.60 or 1.1% to 5,207 and the broader All Ordinaries Index decreased 52.60 to 5,222.10.

For the month, ASX 200 tumbled 8.8% and for the three months to August, ASX 200 plunged 10%.

For the six-month ASX 200 plummeted 12.4% and declined 3.8% in the year so far.

In commodities trading, gold added US$2 to US$1,134 an ounce and Brent crude future for immediate month delivery fell 0.68 cents to US$49.37 a barrel.

Australian Stock Movers

Ansell Limited gained 0.8% to $22.13 after the hand and foot protection products maker announced a stock buyback of US$100 million in the next year and will buy 6 million shares from September 15 from the existing cash reserves.

Austral Gold Limited closed unchanged at 16 cents after the gold and silver producer agreed to acquire Argentina-based Argentex Mining Corporation.

The company will exchange .56 of Austral shares for every share of Argentex or offer CAD$0.08 per share of Argentex.

Infigen Energy Ltd plunged 8.2% to 22.5 cents after the wind farm operator said revenues in the year ending in June declined 8% to $133.8 million from a year ago.

Net loss in the year soared after the company wrote down assets in its U.S. operations.

Net loss in the year soared to $303.6 million compared to $8.9 million and diluted loss per share jumped to 37.2 cents form 3.1 cents in the same period a year ago.