Australia Plunges 4.3%

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

Australian stocks plunged 4% after the U.S. private sector employment report. Commodities and energy prices dropped as well. Australia employment adjusted for seasonal factors rose in October, unexpectedly. Media conglomerate News Corp first quarter net dropped to $515 million from $732 million.

[R]3:00AM New York, 7:00PM Sydney – Stocks in Australia plunged on the worries that U.S. may be heading for a recession after the private sector lost jobs in October. Australia employment rises 34,300 in October.[/R]

Australian market averages fell 4.3% as recession fears mounted on falling profit and negative earnings forecast by News Corp. and after ABC Learning was put under voluntary administration. An estimated A$50 billion was wiped off the market today.

Commodity stocks also dropped as fuel and metal prices declined.

In Sydney trading ASX 200 fell 4.3% or 186.9 to 4,149.70.

Of the ASX 200 index stocks 20 increased, 175 fell, and 5 were unchanged. Mirvac Group led advancers in the index shares with a rise of 31.5% followed by Henderson gaining 11.4%.

Australia''s Employment Rises 34,300 to 10.8 million in October

Australian Bureau of Statistics reported today that the country''s employment rate in seasonally adjusted unexpectedly rose by 34,300 to 10,768,300, while part-time employment soared 43,500 to 3,080,100 in October.

However unemployment remained steady at 4.3% and the male unemployment rate remained unchanged at 4%. The female unemployment rate gained 0.1 percentage points to 4.8%.

ABS also said the participation rate increased 0.1 percentage point to 65.3%.

New Corp. Profit Falls

News Corp. reported today that profit in the first quarter ended September 30 fell to $515 million from $732 million in the comparable period a year earlier as income from affiliates plunged.

Operating income in the period declined 9% to $953 million from $1.05 billion a year ago on declines at the television, filmed entertainment and other segments.

U.S. Private Employers Cut 157,000 Jobs in October

ADP Employer Services reported yesterday U.S private employers slash 157,000 jobs in October and revised jobs lost in September to 26,000 from the initial loss of 8,000.

Analysts had earlier expected a cut of 100,000 private sector jobs in October.

Gainers & Losers

Mirvac Group led advancers in the ASX 200 index shares with a rise of 31.5% followed by increases in Henderson of 11.4%, in Australian Wealth of 5.4%, in Dexus Property of 5.3%, and Alumina Ltd. of 4.6%.

Babcock & Brown led decliners in the ASX 200 index shares with a fall of 29% followed by losses in News Corp. of 21.4%, in MacMahon Holdings of 19.7%, in Ausenco Ltd. of 18.7%, and Atlas Iron of 17.8%.

Atlas Iron fell as metal prices dropped on fears demand will drop as the global economy slips into a recession. Gold prices slid $14.90 to $742 per ounce and oil priced declined $5.23 to $65.3 per barrel.

Platinum Australia plunged 13.6% and Paladin Energy plummeted 12.3% as a result.

Westpac in A$200 million Exposure to ABC Learning

Westpac said it has A$200 million exposure to ABC Learning Centre, the company filed for voluntary administration.

“Westpac will review the implications of the appointment of the voluntary administrators to ABC and adjust existing provisions as required,"" the lender said in a statement.

Separately, ANZ said that it has an exposure of A$182 million to ABC.