Australian Unemployment Rises

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

Stocks in Australia shrugged of a series of interest rate cuts in the region and closed lower after unemployment rate increased in September and global economic worries dominate the economy. The Reserve Bank of Australia injected A$3.49 billion into the money markets today.

[R]3:00AM New York, 7:00PM Sydney- Australian unemployment rate rises 4.3% in September.[/R]

Stocks in Australia shrugged of a series of interest rate cuts in the region and closed lower after unemployment rate increased in September and global economic worries dominate the economy.

Market Sentiment

In Sydney trading ASX 200 declined 1.53% or 67.2 to 4,320.90.

Of the 200 ASX 200 stocks 66 increased, 126 declined, and 8 were unchanged. Paperlinx led advancers in the index shares with a rise of 27.78% followed by Newcrest Mining advancing 15.09% after gold prices topped $900 per ounce as investors sought a safe haven from deteriorating market conditions.

Australia''s Unemployment Rises 4.3% in September

The Australian Bureau of Statistics reported on its Web site today that the country''s unemployment advanced 4.3% or 21,700 to 479,600 in seasonally adjusted terms in September.

The rate had risen by 4.1% in August.

Persons searching for full-time employment in the period gained by 4,400 to 326,800 and those looking for part-time employment soared by 17,300 to 152,800.

On the overall, the unemployment rate advanced by 0.2 percentage points to 4.3%, while the male unemployment rate increased by 0.2 percentage points to 4% and the female unemployment rate edged up 0.2 percentage points to 4.6%.

The statistics bureau also noted that employment rose by 2,200 to 10, 737,400 and full-time employment fell by 15,400 to 7,706,800.

Part-time employment rose by 17,700 to 3,030,500.

Central Banks Cut Key Rate

Asian central banks ratcheted up efforts to provide liquidity as the interbank markets continued to be tight. In particular, China yesterday cut its key lending rate by 0.5% and lowered the cash reserve ratio requirement for banks after the U.S. Federal Reserve lowered the rate by 0.5%.

Hong Kong Monetary Authority lowered its base rate by 100 basis points to 2.3%, while Bank of Korea slashed its seven-day repurchase rate by 25 basis points to 5%.

The Bank of Japan this week kept its key rate at 0.5%, which is the lowest among the seven industrialized countries, but pumped 4 trillion yen today.

Despite the additional liquidity in Japan, overnight loan rate advanced to 0.51% from 0.50% as banks continue to hoard cash.

The Reserve Bank of Australia also injected A$3.49 billion into the money markets today.

Gainers & Losers

Paperlinx Ltd. led advancers in the 200 ASX 200 index shares with a rise of 27.78% followed by increases in Newscrest Mining of 15.09%, in St Barbara Ltd of 14.89%, in Lihir Gold of 11.86%, and Avoca Resources of 11.83%.

Lihir Gold gained after gold prices increased 2.8% to $906.50 as investors hedged their positions from worsening conditions in the financial markets.

Sino Gold Mining advanced 5.80% as well.

Valad Property led decliners in the ASX 200 inde x shares with a fall of 50% followed by Sundance Resources of 25%, in Mount Gibson Iron of 24.24%, NRW Holdings Ltd. of 19.83%, and Nexus Energy of 18.30%.

Valad Property declined on prevalent tightened lending conditions.

Commonwealth Bank of Australia to Acquire BankWest for A$2.1 billion

Commonwealth Bank of Australia reported on its Web site today that it has acquired the Bank of Western Australia Ltd and St Andrew''s Australia Pvt Ltd from the troubled British lender HBOS. The deal is however subject to regulatory approval.

The lender sold 52.6 million new shares at A$38 per share, which is a 16% premium to its closing price on October 7.

Credit rating agencies Standard & Poor''s, Moody’s and Fitch have confirmed the Group''s credit ratings for the post acquisition period.