Retail Sales Rise, Aussie Dollar Slides

123jump.com Staff
08 Sep, 2008
New York City

Stocks in Sydeny fell 1.7% after metal prices fell and the Australian dollar edged lower aginst the U.S. dollar. The ABS reported retail sales in July rose 0.1%. Separately, in a survey published by National Australian Bank reported business confidence at 7-year low and the bank lowered its forecast for economic growth to 2.5% in 2008 and kept it unchaged at 2.25% in 2009.

[R]3:00AM New York, 7:00PM Sydney - Retail sales increased 0.1% in July. Business confidence remains at seven-year low.[/R]

Stocks in Australia fell led by commodity stocks after metal prices slipped in the wake of a soaring dollar.

Market Sentiment

In Sydney trading S&P/ASX 200 dropped 1.72% or 87.4 to 4,980.10. Of the S&P/ASX 200 stocks 49 rose, 141 declined, and 10 were unchanged. Nexus Energy Ltd. led advancers in the index shares with a rise of 11.60%.

Retail Sales Rise 0.1% in July

The Australia Bureau of Statistics reported on its Web site today that the trend estimate of turnover for the Australian retail series increased by 0.1% for the month and advanced 3.1% from a year earlier to A$18.2 billion in July 2008.

Also the trend estimate was revised by 0.1% for each of the last three months.

Industries that mainly contributed to the increase include food retailing rising 0.2%, department stores gaining 0.1%, household good retailing advancing 0.6% and other retailing soaring 0.3%.

Conversely, clothing and soft good retailing shed 0.3% and Cafes, restaurants and takeaway food services dropped 0.7%.

States that have the largest increase in the trend estimate were Northern Territory rising 1.2%, Western Australia, Tasmania increasing 0.7% and South Australia soaring 0.6%. In addition, the trend estimate for Chains and other large retailers edged up 0.3% in July from June and 5.7% from the previous year.

Business Confidence Remains at 7-Year Low

National Australia Bank reported on its Web site that business sentiment rose 2 points to minus 7 in August as business conditions and confidence stabilize around low levels. All sectors continue to deteriorate with the exception of mining.

Business sees no improvement in prospect while forward orders continue to decline. The GDP forecasts were lowered to 2.5% in 2008 but unchanged in 2009 at 2.25%.

On the overall, the NAB believes that Reserve Bank of Australia will continue to follow tighter monetary policy and the lender expects another 25 point cut before end 2008 and 100 points over the next year.

Gainers & Losers

Nexus Energy led advancers in the S&P/ASX200 index shares with a rise of 11.60% followed by increases in Connecteast Corp. of 9.58%, in Independence Group of 8.54%, in ABB Grain Ltd of 5.95%, and News Corp. of 391%.

Centro Retail Group led decliners in the S&P/ ASX 200 index shares with a drop of 16.33% followed by losses in Kagara Ltd of 11.78%, in Allco Finance of 10.20%, in Centro Properties of 10%, and Fortescu Metals of 8.45%.

Commodity stocks slipped as metal prices slipped. O2 Minerals Ltd advanced 5.96%, Paladin Energy of 6.61%, and Minerals Resources of 5.13%.