Sydney Stocks Up; Businesses Finght Wage Rise

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

Australian market averages rose 2.4% as financial stocks increased on the hopes that the U.S. Treasury plan to work with private sector to isolate toxic assets may contain fall in financial markets. The news about another Japan stimulus lifted trading sentiment.

[R]3:00AM New York, 7:00PM Sydney - Australian businesses lobby for the suspension of minimum wage increases. Swan cautions on economic growth prospects.[/R]

Australian market averages rose 2.4% as financial stocks increased on news that the U.S. Treasury is considering to work with private sector to help isolate toxic assets.

Investor sentiment was also strengthened on optimism global stimulus plans will help spur economic growth.

In Sydney trading ASX 200 index increased 2.4% or 84.5 to 3,550.30.

Of the ASX 200 index stocks, 135 gained, 49 dropped, and 16 were unchanged. Lynas Corp. led gainers in the index shares with a rise of 45.5% followed by ING Industrial advancing 23.8%.

ACCI Lobbies for Deferment of Minimum Wage Increases

The Australian Chamber of Commerce and Industry (ACCI) reported today that it has lodged a submission on the Australian Fair Pay Commission to defer any decision to increase the country’s minimum wage until “the impact of the global economic recession on Australia’s small and medium business sector is clearer, and our rising unemployment has stabilized.”

Australia’s Council of Trade Unions is advocating for small and medium businesses to pay A$21 per week more in wages to cushion workers from the deteriorating global financial crisis.

According the report, the wage increases will add A$1.4 billion on the wage bill and another A$300 million in additional costs such as higher superannuation, workers compensation levies and payroll tax.

ACCI chief executive officer Peter Anderson said increases across 1.3 million employees and 250,000 small and medium businesses have great downside risks to jobs.

Anderson says incomes of employees have increased in the past six months on tax cuts, the October A$21.66 per week wage rise, interest rate reductions and government payments made under the December and March stimulus packages.

“A$1.7 billion cannot be added to the costs of employment in the midst of a global recession without a severe risk to jobs and job security. Although Australia''s employers, through ACCI, have supported moderate minimum wage rises in seven of the past nine years, if ever there is a year to pause before awarding new across-the-board increases, 2009 is the year for caution and economic responsibility to be exercised,” explained Anderson.

Swan Warns of Negative Economic Growth

The Australian newspaper reported today that Treasurer Wayne Swan said yesterday the deepening global economic recession makes it impossible for the country to sustain positive economic growth.

Swan notes that the projections are premised on the recent gloomy global economic forecast by the International Monetary Fund.

Gainers & Losers

Lynas Corp. led gainers in the ASX 200 index shares with a rise of 45.5% followed by gains in ING Industrial of 23.8%, in PMP Ltd of 21.3%, in Challenger Financial of 18.8%, and Babcock & Brown of 18.3%.

Babcock & Brown and other financial stocks gained on expectations global stimulus plans in China, Japan and the U.S. will prop economic growth.

Macquarie Office led decliners in the ASX 200 index shares with a fall of 8.6% followed by losses in Mirvac Group of 6.1%, in Futuris Group of 5.6%, in Duet Group of 5.4%, and Nufarm Ltd. of 4.9%.