Sydney Realty, Resource Stocks Fall

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

Stocks in Australia closed lower in a volatile trading. Weak crude oil, base and precious metal prices contributed to the decline in resource stocks in the region. The spread in the interbank lending rate between overnight and 3-month loans fell after the RBA injected liquidity in the money market.

[R]3:00AM New York, 7:00PM Sydney - Falling commodity stocks offset Australian stocks recovery.[/R]

Australian stocks in a volatile trading closed lower. Precious and base metals and crude oil prices declined to the lows of the year.

Realty stocks shed after a survey showed that median rents in the capital dropped 2% for the quarter to September.

Market Sentiment

In Sydney trading ASX 200 fell 1.06% or 42.6 to 3,970.80.

Of the ASX 200 index stocks 89 increased, 96 declined, and 15 were unchanged. Straits Resources Ltd. led advancers in the index shares with a rise of 33.03%.

Canberra’s Rents Fall 2% in Q3

Property information supplier, Australian Property Monitors reported today that Canberra’s median rents declined by 2% in the three months to September. The survey noted that weekly rents in the capital fell 2% for houses and 1% for units.

Median unit rents in Perth declined 6% in the review period and also down in Hobart and on the Gold Cost.

However, rents in Sydney and Melbourne, the most populous cities, were unchanged.

Median housing rents gained 2% in Sydney and Hobart, but remained unchanged in Melbourne, Brisbane, Adelaide and Perth.

Australian Property Monitors'' senior economist, Liam O''Hara said, ''There may be further moderation in median asking rents for the remainder of the year as the possibility of a global recession feeds into the economy.''''

Retail banks have slashed their standard variable mortgage rate by a percentage point in the past two months.

RBA Increases Liquidity

The Reserve Bank of Australia injected A$2.11 billion into the money markets through repurchase agreements after forecasting a A$1.94 billion deficit in the market.

Australian banks increased deposits held at the RBA by $1.01 billion to $10.826 billion yesterday.

The spread between the overnight and three months lending rate charged by banks to each other fell to 73.08 basis points 78.50 yesterday.

Gainers & Losers

Straits Resources Ltd. led advancers in the ASX 200 index shares with a rise of 33.03% followed by increases in FKP Property Group of 16.19%, in ABB Grain Ltd. of 12.79%, in HFA Holdings Ltd. of 9.52%, and Macquarie Media of 7.92%.

FKP Property soared after the lender ANZ Banking Group slashed its variable home loan interest rate by 25 basis points to 8.32% as credit conditions improved.

Valad Property led decliners in the ASX 200 index shares with a fall of 15.6% followed by losses in Mount Gibson Iron of 14.8%, in Macquarie DDR of 13.2%, in Kagara Ltd. of 12.5%, in Platinum Australia of 12%. Abacus Property shed 7.97% along with Valad fell on the fall in housing rental market.

Crude oil fell for November delivery to $68.57 yesterday as the U.S. Energy Department reported increase in inventories and a fall in demand in its latest weekly petroleum data.

Copper, Metals Prices Fall

Copper declined the most in two year to $4,545 a ton on fears that slowing construction will drag the demand lower. Lead lost 7.3% to $1,385 a ton and nickel dropped 5.1% to $11,150 a ton yesterday.

The Baltic Dry Index, which measures the cost of shipping bulk commodities, fell 6.75%. The Capesize rate, the average daily cost of the largest dry shipping vessel, declined 11.4% $11,580 a day yesterday.

Roc Oil shed 10%, Avoca Resources fell 9.78% and Gloucester Coal declined 8.41%.

Australia & New Zealand Banking Group Cuts Variable Home Loan Rate

ANZ Banking Group reported lowered its variable home loan interest rate by 0.25 percentage points to 8.32% from Monday October 27.

Rates for business lending, including agri-business, will also be slashed after the recent decline in the cash rate and deposit rates are expected to be reviewed as well.

This week the bank slashed fixed rates for home loans in tandem with easing market conditions.