Australia Drops 6.6%, NAB Net Down 11%

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

Australian stocks plunged 6.6% after the weak U.S. retail sales dragged markets in China and Japan. Global market worries dragged the indexes sharply lower in Asia. National Australia Bank reported full-year profit to September will fall 11% to A$3.9 billion from A$4.4 billion a year ago.

[R]3:00AM New York, 7:00PM Sydney - Global recessionary fears drag Australian stocks. National Australia Bank estimated full-year profit to decline 11%.[/R]

Australian stocks dropped 6.6% led by commodity stocks on concern a global recession will affect demand for raw materials.

National Bank of Australia, the country’s biggest lender, reported full-year profit to September will fall 11% and CSR Limited, the third largest producer of building products, lowered its profit estimate.

Falling U.S. retail sales also sparked concern demand from the world’s biggest economy is declining.

Pharmaceutical companies however trimmed losses.

Market Sentiment

In Sydney trading ASX 200 index plunged 6.67% or 286.6 to 4,013.40.

Of the ASX 200 index stocks 3 rose, 194 fell, and 3 were unchanged. Ramsay Health led advancers in the index shares with a rise of 2.17%.

National Australia Bank Profit Falls

National Australia Bank reported full-year profit to September will fall 11% to A$3.9 billion from A$4.4 billion a year ago.

The largest lender decided to advance its full-year earnings announcement by 10 days to October 21 “in order to provide the market with additional clarity on its financial position” in the wake of recent “extreme levels of volatility and uncertainty”.

Core Tier-1 ratio will be above 7% after the bank raised additional capital. Second half dividend will match the first half payment at 97 cents per share.

U.S. Retail Sales Decline 1.2% in September

The U.S. Census Bureau reported yesterday that total retail trade sales declined 1.2% from a month ago and fell 1.4% from a year earlier to $375.5 billion.

Gasoline station sales rose 17.8% from the same period a year ago and sales of food and beverage stores edged up 5.1% from September 2007.

Reserve Bank of Australia Adds A$2.79 billion

The Reserve Bank of Australia injected A$2.79 billion into the financial system today after forecasting a money market deficit of A$1.82 billion.

Interbank rates for three-month loans dropped to 5.695% as a result.

Australian Dollar Falls

The Australian dollar plunged 8% to 64.97 American cents and dropped 7.3% to 66.48 yen from 71.67 yesterday against the yen.

Gainers & Losers

Ramsay Health led advancers in the ASX 200 index shares with a rise of 2.2% followed by increases in Resmed Inc-CDI of 1.6%, and Sigma Pharmaceutical of 1.4%.

Nexus Energy led decliners in the ASX 200 index shares with a fall of 24.2%, in Acquarius Platinum of 24.2%, in Gloucester Coal of 22.3%, and Queensland Gas of 19.7%.

Commodity stocks fell after crude oil prices dropped 2.1% to $72.96 per barrel and copper prices extended losses.

Riversdale Mining shed 19.02%, Felix Resources plunged 18.03%, and Mincor Resources declined 17.52%.