Australia Rebounds 2% Despite Weak and Volatile Housing Data

Marcus Jacob
30 Sep, 2015
New York City

Australian market indexes soared 2% following a market advance in the region. New home construction in August declined 6.9%, significantly lower than the expectations of 2% fall but rose 5.1% from a year ago.

[R]5:30 PM Sydney, Australia – Australian market indexes soared 2% following a market advance in the region. New home construction in August declined 6.9%, significantly lower than the expectations of 2% fall but rose 5.1% from a year ago.[/R]

Australian market indexes soared in a broad rally supported by advance in banking stocks despite the weak housing market data.

The seasonally adjusted total number of building approvals in August declined 6.9% to 18,701 compared to upwardly revised 7.9% surge in July, the Australian Bureau of Statistics said.

For the year, total number of building approvals jumped 5.1% following the upwardly revised 17.9% soar in the previous month.

The seasonally adjusted estimated value of total building approved in August plunged 5.6% after increasing 9.2% in July.

The volatile multi-family construction led the decline in the month after plunging 21.6% from July.

In August, the total value of private sector credit was increased 0.6% and unchanged from the previous month, the Reserve Bank of Australia reported.

The bank said for the year, credit surged 6.3% from 6.1% increase in July.

Australian dollar closed at 70.13 U.S. cents and in stock trading turnover jumped to 1.02 billion shares worth $6.2 billion.

At close, the ASX 200 Index jumped 103.20 or 2.1% to 5,021.60 and the broader All Ordinaries Index increased 100.50 or 2% to 5,058.60.

For the month, ASX 200 declined 4.8% and for the third-quarter plunged 8.2% and plummeted 5.5% from a year ago month.

In commodities trading, gold slid US$1 to US$1,126 an ounce and Brent crude future for immediate month delivery fell 43 cents to US$44.80 a barrel.

Australian Stock Movers

AGL Energy Ltd slipped 1.6% to $15.97 after the gas and electricity distributor forecasted profit for the year to increase between 3% and 14% compared to fiscal 2015.

The company estimated operating profit for the year in the range of $650 million to $720 million compared to $630 million a year ago.

Origin Energy Ltd was halted at $6.10 after the oil and gas explorer plans to raise $2.5 billion or US$1.4 billion through a steeply discounted capital raising along with cost cuts and asset sales of about $800 million by first-half of 2017.

Origin launched an underwritten share offer of 4-for-7 at $4 per share, a 34% discount to yesterday’s closing price.

The company plans to reduce below $9 billion by mid-2017.

Rio Tinto Limited jumped 4.5% to $48.60 after the mining company agreed to sell its 40% stake in the Bengalla coal mine in Australia to New Hope Corporation for about $606 million or £400 million.

Bengalla the smallest coal mines in the Hunter Valley near Sydney in which Rio Tinto is the stakeholder.

New Hope Corp stock soared 7% to $1.77.

TPG Telecom Ltd soared 7.1% to $10.86 after the communication services provider transferred its 320,000 mobile users to Vodafone Hutchison Australia''s network as part of $1 billion deal, including providing of infrastructure and network services.