Australia Follwows U.S. Losses

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

Australian stocks sharply lower after historic losses in the U.S. market indexes. Australia added liquidity in the system in coordination with the central banks in Europe and the U.S. Of the stocks in ASX index, 158 declined. Australian dollar fell against the U.S. dollar and crude oil dropped 10%.

[R]3:00AM New York, 7:00PM Sydney - Australia''s total credit to private sector falls 0.5% in August.[/R]

Stocks in Australia slumped after historic drops in market averages in the U.S. The legislators rejected a bank bailout proposal stunning the market and most investors. The controversial bill provisioned $700 billion of bank bailout that required little oversight and checks from the U.S. Congress.

Market Sentiment

In Sydney trading ASX declined 4.3% or 206.9 to 4,600.50.

Of the 200 ASX 200 stocks 33 rose, 158 declined, and 9 were unchanged Great Southern Ltd. led advancers in the index shares with a rise of 10.67%.

U.S. House of Representatives Reject Draft Bailout Plan

The U.S. House of Representatives yesterday shot down the proposed $700 billion rescue plan by a vote of 228 to 205 on fears that the ""hastily"" prepared Emergency Economic Stabilization Act doesn''t provide sufficient oversight and may saddle the nation with a huge debt.

The 133 Republicans voted against the proposal despite appeals by President Bush that the plan is necessary and good for the economy. The skeptical lawmakers up for reelection listened to the voters concerns who perceive the bailout plan as a giveaway to rich bankers.

The bailout rejection dived most market indexes to a largest one-day loss since the 1987 crash, with the Dow Jones plummeting by a record 777 points.

The proposed legislation would give Treasury $250 billion immediately and distribute the additional funds in installments on the President and Congress approval.

Australia''s Lending Eases to 0.5% in August

The Reserve Bank of Australia reported on its Web site today that total credit to the private sector by financial institutions eased to 0.5% in August from 0.6% the previous month. Total credit however rose 10.5% from the same period a year earlier.

The RBA also noted that M3 supply gained by 1.1% and broad money supply increased by 0.7%. Broad money supply also grew 14.2% year-on-year.

Australia Dollar Falls

The Australian dollar fell 2.1% to 79.76 American cents and slipped 1% to 66.94 Australian cents against the New Zealand dollar.

Gainers & Losers

Great Southern Ltd. led advancers in the ASX 200 index shares with a rise of 10.67% followed by increases in Macquarie DDR Trust of 6.90%, in Gunns Ltd of 5.96%, in Timbercorp of 5.13%, and Hills Industries of 4.16%.

Centro Retail Group led decliners in the ASX 200 index shares with a fall of 20.69% followed by losses in FKP Property Group of 19.62%, in Babcock & Brown of 17.23%, in Fortescue Metals of 16.79%, and Aquarius Platinum of 13.93%.

Commodity stocks fell after oil prices tumbled 9.8% to $96.37 yesterday. Zinc slid 4.4%, copper dipped 4.9% and nicked plunged 3.5%.

However gold prices soared 0.7% to $894.40 an ounce. Murchison Metals dropped 12.67%, Rio Tinto dived 11.52% and Minara Resources declined 9.94%.