Australian Confidence Rise; Karoon Gas Up

123jump.com Staff
10 Jun, 2009
New York City

Stocks in Australia surge after consumer confidence soars. The government stimulus and first quarter GDP expansion contributed to the confidence boost. The home loans increased in April and loans to first time home buyers were 28% of all loans. Karoon Gas raised A$150 million.

[R]3:00AM New York, 7:00PM Sydney – Stocks in Australia surge after consumer confidence soars. The government stimulus and first quarter GDP expansion contributed to the confidence boost. The home loans increased in April and loans to first time home buyers were 28% of all loans.[/R]

Stocks in Australia gained the most since November 10 as confidence increased to a 22-year high after the economy unexpectedly avoided a recession according to a private report.

The government also noted that housing finance commitments increased 3.6% in April.

Commodities linked stocks were among the most active after crude oil prices rose to $70 per barrel and gold prices jumped 0.2% to $954.70 per ounce. Roc Oil advanced 9.1% and Centennial Coal gained 8.4%.

In Sydney trading ASX 200 Index rose 2.3% or 89.5 to 4,024.40.

Of the ASX 200 index shares 148 increased, 31 declined, and 21 were unchanged. Nexus Energy Ltd led gainers in the index shares with a rise of 16.4% after crude oil surged to $70 a barrel.

Australia Consumer Confidence Soars in June

Westpac reported today that the Westpac-Melbourne Institute index of consumer confidence jumped 12.7% to 100.1 in June, rising the most in 22 years. Optimists now outnumber pessimists and the index for the first since January 2008 reached above 100 mark.

Australia’s gross domestic product rose 0.4% in the first three months of the year from the previous quarter avoiding the recession that most of the advanced economies in the world are facing.

Four of the five components of the confidence index gained, with expectations for economic conditions in the next five years increasing 20.2%. Assessments for family finances advanced 11.1%. However a measure of whether now is a good time to buy a major household item declined 1.6%.

Confidence in economic conditions over the next 12 months advanced 37%.

Westpac chief economist Bill Evans said the unemployment rate fell 5.4% in April on the assumption Australia had avoided a recession, but cautioned that the reaction of consumers is premature.

Housing Finance Commitments Rise 3.6% in April

Australian Bureau of Statistics reported today that the total value of dwelling finance commitments, excluding alterations and additions rose 3.6% to A$21.5 billion in seasonally adjusted terms.

Investment housing commitments increased 8.9% to A$5.5 billion and owner occupied housing commitments increased 1.9% to A$60.4 billion.

Australian Dollar Edges Higher

The Australian dollar rose 0.9% to 80.82 U.S. cents on the back of a rally in crude oil. Australian dollar has been supported by the expected rise in export demand for iron ore, copper, zinc, natural gas and crude oil.

Gainers & Losers

Nexus Energy increased 16.4% to 35 cents, Fortescue Metals advanced 15.4% A$3.59, Murchison Metals jumped 10.7% to A$1.96 and Sundance Resources climbed 9.4% to 17.5 cents.

Copper prices also advanced to an 8-month high. Centennial Coal gained 8.4% to A$2.40.

BHP Billiton increased 3.3% to A$37.70 after it agreed to slash contract prices for metallurgical coal by 58% with a large number of customers. Metallurgical coal demand is on the decline on worsening conditions in the global economy.

JB Hi-Fi Limited surged 5.2% to A$14.90 after it lifted its earnings outlook. Goldman Sachs JBWere, UBS and Royal Bank of Scotland revised their outlook and price targets for the company after the earnings revision.

Karoon Gas Australia increased 1.3% to A$7.00 after it raised A$149.6 million through placement of 22.33 million shares priced at A$6.70 a share.

ASX 200 Index Movers

Energy Resources of Australia Limited led the decliners in the ASX 200 index of 7.0% followed by losses in Mirvac Group of 5.0%, in Babcock & Brown Infrastructure Group of 3.6%, in Wotif.com Holdings Ltd of 3.0% and in OZ Minerals Limited of 2.2%.

Nexus Energy Limited led gainers in the ASX 200 index with a rise of 16.3% followed by gains in Fortescue Metals Group Ltd of 15.4%, in Western Areas NL of 13.5% and Panoramic Resources Limited of 12.7%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 204.67 or 2.09% to 9,991.49, Hang Seng index in Hong Kong increased 727.17 or 4.03% closed to 18,785.66, CSI 300 index in China higher 29.04 or 0.98% closed to 2,989.60. ASX 200 index in Australia increased 89.50 or 2.27% closed to 4,024.40. The KL Composite index in Malaysia higher 11.18 or 1.04% closed to 1,082.97.

The Kospi Index in South Korea increased 43.04 or 3.14% to close at 1,414.88.SET index in Thailand closed higher 16.82 or 2.77% to 624.55 and JSE Index in Indonesia increased 15.52 or 0.74% closed to 2,108.81. The Sensex index in India increased 339.81 or 2.25% closed to 15,466.81.