Australia Holds Rates, Retail Sales Weak

123jump.com Staff
03 Mar, 2009
New York City

Australia keeps interest rates unchanged at 3.25%. Australia retail sales increase 0.2% to A$19.2 billion in January. Current account deficit falls 32% to A$6.5 billion in December quarter.

[R]3:00AM New York, 7:30 PM Sydney - Australia keeps interest rates unchanged at 3.25%. Australia retail sales increase 0.2% to A$19.2 billion in January. Current account deficit falls 32% to A$6.5 billion in December quarter.[/R]

Australian stocks fell 1% led by commodity-related stocks as crude oil prices dropped 0.3% and gold prices declined 10.3%.

A government report also showed that the country’s current account deficit tumbled 32% in the three months ended December.

In Sydney trading ASX 200 index declined 1% or 30.9 to 3,219.20.

Of the ASX 200 index stocks, 51 increased, 133 declined, and 16 were unchanged. Asciano Group led gainers in the index shares with a rise of 41.6% followed by Abacus Property gaining 21.6%.

Retail Sales Rise in January

Australian Bureau of Statistics reported today that the seasonally adjusted estimate of retail sales jumped 0.2% to A$19.2 billion in January after rising 3.8% in December.

However, unadjusted sales dropped 23% in January from a month earlier as chains and other large retailers fell 24.6%, while the estimate for smaller retailers plunged 19.8%.

Australian turnover rose 6.3% in January from the same period a year ago after chains and other large retailers advanced 10.5% and smaller retailers fell 0.6%.

Industries that increased in the month in seasonally adjusted terms were food retailing 1.5%, clothing and soft good retailing 0.8%, other retailing 0.2% and cafes, restaurants and takeaway food services 2.3%.

Conversely, department stores fell 0.5% and household good retailed dropped 4%. In addition, states that increased include New South Wales1.9%, South Australia 0.1%, Western Australia 1.4% and the Australian Capital Territory1.5%.

Victoria fell 1.8% and Tasmania declined 2.9% while Queensland remained unchanged.

Current Account Deficit Drops 32%

The statistics bureau noted that the country’s current account deficit fell 32% to A$6.5 billion in seasonally adjusted terms.

The surplus on goods and services climbed A$2.7 billion to A$4.1 billion and the income deficit slipped 4% to A$10.4 billion.

Australia’s net international investment position increased A$4.1 billion to a net liability position of A$713 billion, while its net foreign debt advanced by A$20.1 billion to a liability of A$678.3 billion.

RBA Keeps Rates at 3.5%

Reserve Bank of Australia today elected to keep its key interest rates unchanged at 3.25% after noting that demand in the country has not been as weak as in other countries.

RBA governor Glenn Stevens said, ""Market and mortgage rates are at very low levels by historical standards and business loan rates are below recent averages, reducing debt-servicing burdens considerably. Together with the substantial fiscal initiatives, the cumulative decline in interest rates will provide significant support to domestic demand over the period ahead.""

Gainers & Losers

Asciano Group led advancers in the ASX 200 index shares with a rise of 41.6% followed by increases in Abacus Property of 21.6%, in Macquarie Group of 10.5%, in Commonwealth Property of 10.2%, and PanAust Ltd. of 9.4%.

Babcock & Brown led decliners in the ASX 200 index shares with a decline of 45.2% followed by losses in GPT Group of 11.3%, in Alesco Corp. of 8.8%, in Platinum Australia of 8.7% and Energy World Corp. of 8.7%.

Gold stocks slipped after gold prices fell. Sino Gold tumbled 8.5% and Lihir Gold fell 5.7%.