New Home Sales, Stocks Rise in Australia

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

Stocks in Australia gained on speculation that latest China rate cut will sustain exports of commodities. New homes sales soar 6.7% in october on lower mortgage rates and increase in tax incentives for the first time home buyers. BHP Billiton will let its filing deadline lapse with the EU and UK.

[R]3:00AM New York, 7:00PM Sydney- Australia new home sales soar 6.7% in October.[/R]

Stocks in Australia increased on a rise in commodity stocks following a surprise interest cut by China.

Oil prices also gained ahead of a meeting by the Organization of Petroleum Exporting Countries on Saturday in Cairo. Oil prices have plunged 63% from the peak in July.

In Sydney trading ASX 200 index rose 1.4% or 48 to 3,588.00.

Of the ASX 200 index stocks 125 increased, 62 dropped, and 13 were unchanged. Babcock & Brown led gainers in the index shares with a rise of 30.3% followed by Babcock & Brown rising 25.8%.

New Homes Sales Rise 6.7% in October

Housing Industry Association reported that sales of new houses increased 6.7% in October buoyed by the 1% interest rate cut by the Reserve Bank of Australia and the sharp increase in government incentive to first time home owners.

Total sales volume increased 4.5% while detached house sales increased by 6.7%. However multi-unit sales slid 8.6% in October and have risen in three of the last ten months.

Sales were mixed in the five mainland states, with Queensland and Victoria rising 24.9% and 20.3% respectively and sales in South Australia edged up 0.5%.

Sales in Western Australia dropped 12.8% after a marked increase in September, while sales in New South Wales plummeted 14.7% in the period.

HIA chief economist Harley Dale said it will take a long time for new home sales and building approvals to rebound following sharp falls in the first nine months of the year.

“The unfortunate and avoidable caveat is that any housing recovery that emerges over 2009 will be constrained by a lack of readily available land, planning delays, and the excessive cost of state and local government taxation on new homes,"" said Harley Dale.

BHP Billiton Offer for Rio Lapses

BHP Billiton reported today that it will be withdrawing its official competition filing from the European Commission and its Registration Statement on Form F-4 from the United States Securities and Exchange Commission.

U.K. Takeover Panel Executive also noted in a statement that the U.K. offer period for Rio Tinto and BHP stopped with immediate effect.

Gainers & Losers

Babcock & Brown led advancers in the ASX 200 index shares with a rise of 30.3% followed by increases in Babcock & Brown of 25.8%, in Gunns Ltd. of 23.5%, in Paladin Energy of 17.2%, and Babcock & Brown of 14.3%.

Paladin Energy and other energy stocks rose after crude oil prices for January delivery gained 7.2% to $54.44 a barrel after China cut its key one year lending rate.

Roc Oil Co. soared 10% and Oil Search Co. edged up 8.9%.

Commodity stocks also gained as metal prices rallied. Copper for March delivery soared 0.2%. Riversdale Mining jumped 11.8% and Aquarius Platinum climbed 11.5%.

HFA Holdings led decliners in the ASX 200 index shares with a fall of 46.7% followed by losses in Pacific Brands of 11%, in Tishman Speyer of 10.7%, in Panaust Ltd of 9.4% and in FKP Property of 8.5%.

Property stocks fell despite a report that new home sales rose 6.7% in October. Australand Property shed 5% and Valad Property lost 3.6%.