Australia Surged 5% Ahead of Rate Decision

123jump.com Staff
03 Nov, 2008
New York City

Australian stocks surged on the hopes that the Reserve Bank of Australia will lower rates tomorrow. The listing for new jobs placement declined in October, home prices fell 1.8% and manufacturing declined in the month. Australian dollar gained to close at 66.02 cents to a dollar.

[R]3:00AM New York, 7:00PM Sydney - Australian stocks rise on rate cut hopes. House prices fall 1.8% in September.[/R]

Australian stocks rose 5% on the rising speculation that the Reserve Bank of Australia will cut its key rate by 50 basis points tomorrow as house prices, retail sales and jobs fall more than forecasted.

Commodity stocks also increased as gold and silver prices advanced on a weakening dollar. Oil increased $1 a barrel to $69.

In Sydney trading ASX 200 rose 5.1% or 203.5 to 4,221.50.

Of the ASX 200 index shares 170 increased, 20 declined and 10 were unchanged. Lynas Corp. led gainers in the index shares with a rise of 40.62% followed by Mincor Resources increasing 32.37%.

House Prices Fall 1.8% in September

The Australian Bureau of Statistics reported today that house prices in the country''s eight capital cities fell 1.8% in the three months to September from the previous quarter.

In the quarter, prices dropped 3.3% in Brisbane, 2.5% in Canberra, 1.9% in Melbourne, 1.8% in Sydney, 1.1% in Perth, and 0.1% in Adelaide.

However prices increased in Hobart and Darwin by 0.7% and 0.1% respectively.

The ABS noted that house prices gained 2.8% from a year ago as prices in Adelaide soared 9.7%, Melbourne increased 8.1%, Darwin advanced 6.4%, Brisbane jumped 5.6%, Hobart climbing 2.4% and Canberra remained unchanged.

For the year, Perth and Sydney shed 4.1% and 0.4% respectively.

Separately the bureau of statistics said the turnover for retail sales gained 0.2% to A$18.4 billion in September.

Industries that recorded an increase were food retailing rising 0.6%, clothing and soft good retailing gaining 0.3%, department stores and Cafes, restaurants and takeaway food services soared 0.2%.

All states recorded an increase except for New South Wales, which fell 0.3%.

Retail sales slid 4.4% in October in after adjusting for seasonal changes.

Australian Manufacturing Falls

The Australian Industry Group reported today that manufacturing fell 6.8 points in October to 40.4, the lowest since 1992.

Australian Industry Group chief executive officer Heather Ridout said, “The volatility in global financial markets is having an unambiguous impact on Australian manufacturing, through slower economic growth both domestically and in its major overseas markets and through uncertainty, which is eroding manufacturers'' confidence in the economic outlook.”

According to the report, falling production represents the decline in new orders.

Newspaper and Internet Job Listings Fall

ANZ said in a report job advertised in newspapers and the Internet declined the most in seven years, falling 5.9% in October to 231,135 a week.

Australian Dollar Rises

The Australian dollar rose to 66.02 cents against the U.S. dollar from 66.45 on Friday last week.

Gainers & Losers

Lynas Corp. led advancers in the ASX 200 index shares with a rise of 40.6% followed by rises in Mincor Resources of 32.4%, in Platinum Australia of 30.5%, and Macquarie Countrywide of 27.6%.

Commodity stocks increased after gold for immediate delivery rose 0.7% to $729.49 an ounce as the dollar dropped to $1.2792 against the euro.

Oil prices increased $1 to $69 per barrel. Aquarius Platinum rose 23.8%, Panoramic Resources gained 20.4%, Roc Oil edged up 19.5% and Paladin Energy soared 14.5%.

Flight Centre led decliners in the ASX 200 index shares with a fall of 6.8% followed by losses in Commonwealth Property of 5.3%, in Macquarie Office of 5.3%, in Seven Network of 4.8%, and Valad Property of 4.8%.

Commonwealth Property fell as house prices dropped 1.8% in the three months to September. CFS Retail Property slid 2% as a result.