Australian Consumer Confidence Declines

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

Australian market averages rose 1.9% after a private report showed that consumer confidence fell less-than-expected. The large economic stimulus package helped to revive consumer confidence but most are still in the wait and see mode. Weak commodities stocks trimmed market gains.

[R]3:00AM New York, 7:00PM Sydney - Australian consumer confidence falls 0.2% in March. Qantas and Etihad Airways are in Strategic Alliance.[/R]

Australian market averages rose 1.9% after a private report showed that consumer confidence fell less-than-expected. The large economic stimulus package helped to revive consumer confidence but most are still in the wait and see mode.

Gains were however pared by commodity stocks that fell on dropping gold and crude oil prices.

In Sydney trading ASX 200 Index increased 1.9% or 59.9 to 3,244.40.

Of the ASX 200 index stocks 132 rose, 54 declined and 14 were unchanged. ING Office Fund led gainers in the index shares with a rise of 22.7% followed by Bradken increasing 19.3%.

Australian Consumer Confidence Falls 0.2% in March

Westpac-Melbourne Institute Index of consumer confidence dropped by a less- than - expected by 0.2% to 85.6 in March from 85.8 in February in the wake of a spate of negative data on employment figures, falling equities and moderating fuel prices.

The index is now 1.7% below its average of the past 12 months and has “fallen by only 3.4% over the last year compared to a fall of 23% in the year to March 2008.”

According to the report, the marginal drop is due to the lagged offsetting effect of the A$42 billion stimulus package that was announced in February.

Consumers’ assessments of their finances however plunged 11.4% in March from the same period a year ago on a media blitz on coverage of falling house prices and on the dropping equity market.

Outlook for finances over the next twelve months fell 0.3% and outlook for economic conditions over the same period shed 1.2% after plummeting 12.5% in February.

The outlook for the economy over the next five years advanced 15.2%. Assessments on whether now is a good time to buy a major household item fell 3.3%.

Paying down debt is now considered the second most preferred use of savings behind bank deposits with 23.4% compared to 32.8% for bank deposits.

Westpac said the combined proportions for property and equities are now running at third at 21.7%.

The report forecasts that cash rates will bottom out at 2% and the central will resort to its conservative approach of using the 25 basis point movements in order to conserve capacity to deal with future unexpected developments.

The Reserve Bank of Australia Board will meet on April 7.

Qantas and Etihad Airways in Strategic Alliance

Qantas Airways announced today it will add four Middle East destinations to its network from March 29 through a new code share arrangement with Etihad Airways.

The airliner said the code share agreement will give Qantas customers non-stop access to Etihada’s Abu Dhabi hub as well as connections to Amman in Jordan, Beirut in Lebanon and Bahrain.

In addition, Etihad Airways will code share on selected Qantas services between Australia and Auckland and on Qantas domestic services between Adelaide and Melbourne, Brisbane and Sydney and Cairns and Sydney.

The deal is however subject to regulatory approval.

Gainers & Losers

ING Office Fund led gainers in the ASX 200 index shares with a rise of 22.7% followed by increases in Bradken of 19.3%, in Valad Property of 18.5%, in Alumina Ltd. of 17.9%, and ING Industrial of 16.7%.

Hills Industries led decliners in the ASX 200 index shares with a fall of 7.8% followed by losses in Australian Agric of 6.7%, in Kingsgate Consolidated of 6.5%, in Sundance Resources of 6.3%, and Lihir Gold of 6.2%.

Lihir Gold fell after gold prices lost 2.4% to $895 per ounce. Crude oil prices also dipped 2.9% to $45.7 per barrel.