Australia's Economic Growth Slows to 2-Year Low

Marcus Jacob
02 Sep, 2015
New York City

Australian economic growth slowed more than anticipated. GDP rose barely in the second quarter from the first after prices of oil, iron ore and other commodities dipped to new lows. Economy may have entered negative zone in the current quarter.

[R]5:30 PM Sydney, Australia – Australian economic growth slowed more than anticipated. GDP rose barely in the second quarter from the first after prices of oil, iron ore and other commodities dipped to new lows. Economy may have entered negative zone in the current quarter.[/R]

Australian stocks turned volatile after stocks in China declined and Japanese stocks lacked direction following another down day in global markets.

In overnight trading, indexes in New York and in Europe plunged between 3% and 4% and crude oil futures halted a 3-day rally with a loss of 7.5%.

Investors in Sydney trading turned attention to domestic economy and the economic growth slowed to 0.2% in the second quarter from the first.

The seasonally adjusted gross domestic product in the second-quarter from a year ago slowed to 2% compared to 2.3% increase in first-quarter, the Australian Bureau of Statistics reported.

Australian dollar closed at 70.4 U.S. cents and in stock trading turnover fell to 1.05 billion shares worth $6.5 billion.

At close, the ASX 200 Index rose 5.10 to 5,101.50 and the broader All Ordinaries Index edged up 2.30 to 5,119.40.

In commodities trading, gold slid US$1 to US$1,142 an ounce and Brent crude future for immediate month delivery slid 37 cents to US$49.19 a barrel.

Australian Stock Movers

Cimic Group Ltd fell 0.9% to $22.90 and the engineering construction company and Leighton Contractors were selected as preferred contractor to design and construct Sydney’s $5 billion new M5 Motorwayin - a joint venture with Dragados and C&T.

Harvey Norman Holdings Limited slumped 3.3% to $4.17 after the home appliance retailer agreed to acquire 49.9% stake in northern Victorian dairy products maker Coomboona for about $34 million.