Australian Unemployment Surges, Stocks Dive

123jump.com Staff
15 Jan, 2009
New York City

Stocks in Australia dropped 4.3% after unemployment rate in December rose to 4.5%. The sharp increase in the rate is another confirmation that the commodities driven economy is decelerating rapidly. However, Rio Tinto coal production in the three months to December rose 8% from the previous quarter.

[R]3:00AM New York, 7:00PM Sydney- Australia’s unemployment rate soars to 4.5% in December.[/R]

Australian market averages fell sharply on a sell-off in stocks as investors were spooked by an increase in unemployment in December sparking fears that Australia is slipping into a recession.

Commodity stocks plummeted on concerns the global economic environment is worsening as corporate earnings continue to fall.

In Sydney trading ASX 200 index dropped 4.3% or 157.5 to 3,529.50.

Of the ASX 200 index stocks, 4 rose, 191 declined, and 5 were unchanged. Felix Resources led gainers in the index shares with a rise of 1.5%.

Australia’s Unemployment Rate Rises

Australian Bureau of Statistics reported today that the country’s employment fell 1.2% from a month earlier and 1.3% from a year ago to 10,742,300 in seasonally adjusted terms.

Full-time employment dropped by 43,900 to 7,640,200 and part-time employment advanced by 42,800 to 3,102,200.

Unemployed persons rose 2.6% from a month ago and jumped 7.6% from the same period a year ago to 501,100 in December.

The ABS also said the number of persons looking for full-time work increased by 2,600 to 349,400 and the number of persons looking for part-time work was unchanged at 151,700.

The unemployment rate in the period increased to 4.5%, with the male unemployment rate gaining 0.3 percentage points to 4.4% and the female unemployment rate falling 0.3 percentage points to 4.5%.

In addition, the participation rate declined 0.1 percentage points to 65%.

BHP Agrees to 75% Increase in Copper Processing Fee with Nippon Mining

Dow Jones reported today that Nippon Mining and Metals said BHP has agreed to a 70% hike in the copper processing fee it pays to the company’s copper business joint venture with Mitsui Mining & Smelting for 2009.

The deal between BHP Billiton and the joint venture Pan Pacific Copper will reduce copper prices for the first time in three years.

According to the report, Pan Pacific’s is in step with the earlier deal struck between Freeport McMoRan and Mitsubishi Materials at US$75 per ton for smelting ore.

The fee may serve as a benchmark price for other smelters including Sumitomo Metal Mining.

Gainers & Losers

Felix Resources led gainers in the ASX 200 index shares with a rise of 1.5% followed by increases in Gloucester Coal of 1.2%, in Mirvac Group of 0.8%, and Duet Group of 0.5%.

Acquarius Platinum led decliners in the ASX 200 index shares with a fall of 18.1% followed by losses in Valad Property of 15.6%, in Boart Longyear Group of 13.2%, in PanaAust Ltd. of 12.5%, and Macquarie Media of 12.1%.

Commodity stocks slid as crude oil prices fell $0.83 to $36.5 per barrel and gold prices shed $11.9 to $808 per ounce. Minara Resources fell 9.5%, Centennial Coal dipped 9% and Energy World Corp declined 10.3%.

Rio Tinto Coal Quarterly Production Rises 8%

Rio Tinto reported today in its quarterly report on coal production that coal & allied share of saleable coal production in the three months to December rose 8% to 4.7 metric tons from the previous quarter.

Hunter Valley Operations production rose 21% following the third quarter maintenance shutdown, Bengalla’s coal production increased 8% and Mount Thorley Warkworth’s production declined 2% from the third quarter.