Australian Retail Sales Rise, Bank Raise Rates

123jump.com Staff
09 Jan, 2008
New York City

November retail sales in Australia rose 0.8% after a revised October sales increased 0.3%. The news lifted Australian dollar but failed to lift ASX 200 Index in Sydney trading. Investors worried that the U.S. economy may be heading for recession sooner than expected. Commonwealth Bank of Australia, the third bank, to increase intertest rates in the last one week.

[R]4:00AM New York, 8:00PM Sydney- ASX 200 index declined 0.7% despite gains in resource stocks.[/R]

ASX 200 index lost 0.7% or 40.4 to close at 6,087.70.

The Preliminary market turnover was 1.66 billion shares worth $5.94 billion, with 367 shares moving up, 885 moving down, and 356 unchanged.

The most actively traded stock was Retail Star, with 67.61 million stocks changing hands with a value of $2.001 million.

Commonwealth Bank of Australia today became the third bank to raise its mortgage rates after increasing its variable interest rate on mortgages to recoup higher funding costs. Third bank has raised interest rates in Australia in the last four days without a similar move from the central bank.

The bank raised its rates for variable home loans by 0.1% to 8.67% for new and existing loans and its variable business loans by 0.15 percentage points. The increase would be effective on Friday.

National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd were the first two banks to raise their rates for variable home loans this month.

Newcrest Mining Ltd''s share gained 6.6% to a record after precious metal prices surged to a high. Gold for immediate delivery rose by 1.5%, to a record $891.70 an ounce today. Investors are increasingly using precious metals and agricultural commodities to hedge the falling dollar.

Gold has added 6% this year after adding 31% in 2007. Oil is nearly unchanged but rose 57% in 2007.

Lihir Gold gained 6.8% and was the leading performer on the exchange today while Sino Gold Mining Ltd rose 6.2%.

The Australian dollar gained following a rise in retail sales in November above economists'' expectations.

The Australian dollar traded lower against the U.S. dollar at $0.8828 up from yesterday''s $0.8794.

Of the ASX 200 index shares, Lihir Gold Limited led the gainers with a rise of 6.8% followed by increases in Newcrest Mining of 6.6%, in Sino Gold Mining of 6.2%, in Coeur D''Alene of 5.6%, and in Pan Australia Resource Limited of 5%.

Of the ASX 200 index stocks, Allco Finance Group led the decliners with a fall of 7.7% followed by losses in Centro Retail of 7.2%, in Compass Resource of 6.9%, in Paperlinx Limited of 6.5% and in DB Trust of 5.9%.