Australia in Recession Says RBA Governor

123jump.com Staff
21 Apr, 2009
New York City

Stocks in Australia declined after the Reserve Bank governor Stevens indicated that the country is in a recession but is prepared to weather the downturn better than most other countries. The direct admission of the economic health put investors on guard. A rise in gold prices lifted gold miners.

[R]3:00AM New York, 7:00PM Sydney – Stocks in Australia declined after the Reserve Bank governor Stevens indicated that the country is in a recession but is prepared to weather the downturn better than most other countries. The direct admission of the economic health put investors on guard. A rise in gold prices lifted gold miners stock but broader market averages declined.[/R]

Australian stocks declined 2.4% after Reserve Bank governor Glen Stevens said the country is in recession.

A rise in gold prices lifted stocks of resources stocks. Gold advanced 2.2% to $887.50 per ounce.

In Sydney trading ASX 200 index fell 2.4% or 91.60 to 3,677.40.

Of the ASX 200 index stocks, 31 gained, 161 declined, and 9 were unchanged. Karoon Gas Australia led gainers in the index shares with a rise of 7% followed by St Barbara Ltd jumping 6.1%.

Australia in Recession, RBA

Reserve Bank of Australia governor Glen Stevens said in a speech to address the Australian Institute of Company Directors today the country has slipped into recession.

He however noted that the country was likely to weather the recession more efficiently and effectively than its peers.

""""Whether or not the next GDP statistic, due in early June, shows another decline, I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession,"""" said Stevens.

Wesfarmers’ Coles Sale Rise 7.6%

Wesfarmers reported today food and liquor sales at Coles advanced 7.6% to A$5.3 billion in the three months to March, while adjusting for the timing of Easter sales jumped 8.3% from the comparable year ago period.

Coles- acquired in November 2007 by Wesfarmers- is presently in the first phase of a five-year restructure of its business. The unit includes Target, Kmart and Officeworks retail outlets.

The report notes that sales at Kmart were poor.

Coles managing director Ian McLeod said, """"It is still very early days in the turnaround. It takes time to improve a supply chain. We’re starting to get better but I still think we have a long way to go.""""

Gainers & Losers

Karoon Gas Australia led advancers in the ASX 200 index shares with a rise of 7% followed by increases in St Barbara Ltd. of 6.1%, in Envestra Ltd of 5.9%, in Dominion Mining of 5.4%, and Newscrest Mining of 4.5%.

Gold stocks increased after gold prices edged up 2.2% to $887.50 per ounce. Sino Gold Mining climbed 3.9% and Avoca Resources increased 3.8%.

Boart Longyear Group led decliners in the ASX 200 index shares with a fall of 20% followed by losses in Acquarius Platinum of 19.2%, in GPT Group of 15.3%, in Goodman Group of 13.7%, and ING Office Fund of 12.6%.

Realty stocks slipped. Abacus Property dropped 12.2% and Valad Property plunged 12.1%.