Australian Loans and Sentiment Index Rise

Darlington Musarurwa
08 Apr, 2009
New York City

Australian consumer sentiment index increased in April and home loan approvals rose for the fifth month in a row. The sharp reduction in interest rates since September and government stimulus plan to sustain the economic growth lifted the sentiment. Stocks fell in trading. Equinox Minerals plunged.

[R]3:00AM New York, 7:00PM Sydney - Australian home loan approvals soar 1.3% to A$19.2 billion in February. Australian consumer confidence rises 8.3% in April.[/R]

Australian stocks plunged despite news that the country’s home loan approvals increased in February and consumer confidence advanced 8.3% in April.

In Sydney trading ASX 200 index fell 2.3% or 86.8 to 3,619.50.

Of the ASX 200 index stocks 30 gained, 157 declined, and 14 were unchanged. MacMahon Holdings led gainers in the index shares with a rise of 13.6% followed by Sundance Resources with a rise of 10%.

Home Loan Approvals Rise 1.3% to A$19.2 billion in Feb

Australian Bureau of Statistics reported today that the total value of dwelling finance commitments, excluding alterations and additions, rose 1.3% in February from the previous month in seasonally adjusted terms.

Owner occupied housing commitments advanced 2.7% to A$14.5 billion, while investment housing commitments declined 2.8%.

The number of dwelling commitments for owner occupied housing edged up 0.4% to 56,235, while construction of dwelling gained 2.6% to 4,557.

The ABS says purchases of new dwellings advanced 4.2% to 2, 364 and purchases of established dwellings remained unchanged at 49,315.

Australian Consumer Confidence Rises 8.3% in April

Westpac-Melbourne Institute index of consumer confidence jumped 8.3% to 92.7 in April from a month earlier, as concerns about the health of the global economy eased. The Australian dollar also increased 11.6% in the period.

According to the report, the government’s stimulus interventions continue to spur confidence.

However, confidence is likely to be pared by the falling unemployment rate over the next 18 months, said the report.

Favorable expectations for economic conditions over the next twelve months increased by 16.9%, while outlook for economic conditions over the next five years gained 4% and opinions of whether now is the good time to buy a major household item gained 3.1%.

Gainers & Losers
MacMahon Holdings led gainers in the ASX 200 index shares with a rise of 13.6% followed by increases in Asciano Group of 7.3%, in Dexus Property Group of 3.4%, and ING Industrial of 2.8%.

Resource stocks increased as gold prices gained 1.2% to $883.3 per ounce. Lihir Gold edged up 2.7% and Arrow Energy advanced 2.6%.

Realty stocks rose after home loan approvals increased 1.3%. Valad Properties jumped 2.6% and CFS Retail Group climbed 1.9%.

Westpac Cuts Mortgage Rates by 10 bp

Westpac today cut its home loan rate by 10 basis points following the Reserve Bank of Australia 25 basis point rate reduction yesterday. Loans for business loans and credit cards were also cut by 25 basis points.

Similarly, Commonwealth Bank of Australia and ANZ lowered their standard variable home loan rates by 10 basis points.