Australian Stocks Drop 0.8%, Jobless Rate Eases to 5.8%

Marcus Jacob
10 Dec, 2015
New York City

Australian market down following weak global markets and despite the positive jobs report. Unemployment rate fell to 5.8% in November and the Australian economy created 71,400 new jobs. Austal Limited tumbled 25% after issuing a profit warning.

[R]5:30 PM Sydney, Australia – Australian market down following weak global markets and despite the positive jobs report. Unemployment rate fell to 5.8% in November and the Australian economy created 71,400 new jobs. Austal Limited tumbled 25% after issuing a profit warning.[/R]

The Australian market continued to decline, despite the latest jobs report showed a decline in unemployment.

The positive jobs report, however, was overshadowed by ongoing concerns about the global economy amid low oil and commodity prices.

The seasonally adjusted unemployment rate declined to 5.8% in November, compared with 5.9% in October, the Australian Bureau of Statistics said thanks to an increase of 71,400 net new jobs.

The Australian dollar jumped to 72.89 U.S. cents and trading turnover slid to 912 million shares worth $5.5 billion.

At the market close, the ASX 200 Index slumped 42.80 or 0.8% to 5,037.70, while the broader All Ordinaries Index fell 42.40 to 5,087.50.

In commodities trading, gold slid US$2 to US$1,075 an ounce and Brent crude future for immediate month delivery rose 36 cents to US$40.47 a barrel.

IPO

Real Estate Investar Group Limited dropped 2.5% to 19.5 cents after the real estate developer priced its stock at 20 cents.

The stock opened at 21 cents and closed at 19.5 cents.

Temple & Webster Group plummeted 18.2% to 90 cents after the online retailer priced its stock at $1.10.

The stock opened at 97 cents and closed at 90 cents.

Wellard Limited closed unchanged at $1.39 after the research and investment information provider priced its stock at $1.39, opened and closed at $1.39.

Australian Stock Movers

Austal Limited tumbled 25.4% to $1.70 after the aluminium vessels maker issued a profit warning over its ship building business in the U.S. because its Littoral Combat Ship project is maturing more slowly than expected.

The company lowered its profit forecast for fiscal 2016 and now expects operating profit to decline between 4.5% and 6.5% from a year ago period.

Mint Payments Ltd surged 79.1% to 12 cents after the mobile payments services provider signed three agreements with a NYSE-listed international payment technology provider.

The agreements will expand the distribution and the capabilities of Mint’s payment services in the Australian and Asia Pacific markets.

Woolworths Limited slipped 0.9% to $23.37 on the news that the supermarket operator allegedly pressured its suppliers for extra payment of $60 million to increase the profit in fiscal 2014.

The Australian Competition and Consumer Commission (ACCC) is expected to sue the retailer in the federal court for the conduct.

The management of Woolworths is accused of approving a scheme to obtain ad hoc payments from a group of more than 800 suppliers, according to the ACCC.

Woolworths said it is reviewing the claims and had been cooperating with the ACCC during the investigation.