Stocks in Australia Rebound 3%

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

Stocks in Australia rebounded sharply on the rise in business confidence. Producer price index rose 1.3% in December from November and 6.5% from a year ago. A rise in commodities and crude oil prices lifted trading sentiment. Macquarie Countrywide led gainers in the ASX 200 index shares.

[R]3:00AM New York, 7:00PM Sydney- Australian Producer Prices Rise 1.3% in the December quarter. Australian business confidence rises in December.[/R]

Australian market averages advanced 3% led by commodity stocks after metal prices rallied and a government report indicated that Australian business confidence gained in December. However, energy stocks plummeted after crude oil prices fell $0.74 to $45.70 a barrel.

In Sydney trading ASX 200 index rose 3% or 101.3 to 3,444.00.

Of the ASX 200 index stocks, 127 advanced, 54 declined, and 9 were unchanged. Macquarie Countrywide led gainers in the index shares with a rise of 22.7% followed by Aquarius Platinum gaining 14.5%.

Australian Producer Prices Rise 1.3% in December Quarter

Australian Bureau of Statistics reported today that producer prices gained 1.3% from a quarter earlier and 6.4% from the same period a year ago in the three months to December.

The rise was due to increases in industrial machinery and equipment manufacturing 12.8%, electronic equipment manufacturing 21.4%, other manufacturing 8.1% and other transport equipment manufacturing 17.4%.

However during the period there were declines in petroleum refining 29.1%.

The ABS also reported that producer prices for intermediate commodities gained 0.9% from the previous quarter and 9.5% from a year ago in the December quarter driven by increases in coal mining 30.3%, iron and steel manufacturing 12.5%, and chemical manufacturing 14.6%.

Gains were pared by oil and gas extraction 23.7%, petroleum refining 22.1% and basic non-ferrous metal manufacturing 18.5%.

Australian Business Confidence Rises in December

National Australia Bank said in a survey released today the country''s business confidence gained 10 points to –20 in December from the previous month as the steep interest rate cuts from the Reserve Bank of Australia and the government''s stimulus package took effect.

However companies expecting the business confidence to deteriorate continue to outnumber those that project an improvement.

The report also showed that the business conditions measure of hiring, sales and profits increased 11 points to –6 in December, while an index of hiring intentions was unchanged at –17.

Chief economist at National Australia in Melbourne said, “The critical question is whether the December reading represents a turning point from overly pessimistic recent readings or a temporary bounce. There is much in the survey to point to the latter outcome.”

Gainers & Losers

Macquarie Countrywide led gainers in the ASX 200 index shares with a rise of 22.7% followed by increases in Aquarius Platinum of 14.5%, in Sims Metal Management of 14.3%, in Leighton Holdings of 11%, and Rio Tinto of 10.9%.

Commodity stocks advanced as gold prices soared $13 to $910 per barrel and copper prices jumped to $1.5825 per ton. Newscrest Mining of 18.4% and Avoca Resources increased 7.5%.

Linc Energy led decliners in the ASX 200 index shares with a decline of 13.9% followed by losses in Valad Property of 10.6%, in Centro Retail Group of 10.5%, in Emeco Holdings of 10.3%, and Babcock & Brown of 9.8%.