Australian Stocks Down; ANZ Net Falls 11%

Darlington Musarurwa
29 Oct, 2009
New York City

Australian stocks dropped sharply tracking losses in New York and Europe. ANZ full year profit drops 11% to A$2.9 billion. Woodside Petroleum commences its expensive exploration in Western Australia. Flight Centre Ltd gained after management guided higher revenues.

[R]3:00AM New York, 7:00PM Sydney – Australian stocks dropped sharply tracking losses in New York and Europe. ANZ full year profit drops 11% to A$2.9 billion. Woodside Petroleum commences its expensive exploration in Western Australia. Flight Centre Ltd gained after management guided higher revenues.[/R]

Australian market averages slumped 2.4% as investor sentiment was dampened by a U.S. private report showing home prices dropped in August.

Commodity stocks extended losses after crude oil prices slipped 2.7% to $77.5 per barrel and gold prices declined 0.5% to $1,030 per ounce.

In Sydney trading ASX 200 Index fell 2.4% or 110.4 to 4,574.70. Flight Centre led gainers in the index shares with a rise of 3.7% followed by Goodman Fielder shedding 1.8%.

The Aussie dollar fell to a low of 89.44 US cents in morning trade before rising to 90.52 cents at the close.

ANZ Profit Declines 11%

Australia and New Zealand Banking Group reported today that its statutory profit for the year ended September fell 11% from a year ago to A$2.9 billion and net income in the six month period advanced 13% to A$1.53 billion.

Market consensus was for a net income increase to A$3.13 billion.

Profit in the Australian region gained 13% to A$2.6 billion as profit in the retail and institutional business jumped 13% and 100% respectively.

ANZ chief executive officer Michael Smith said the credit quality has stabilised considering the resilience of the Australian economy, stabilisation in New Zealand and economic growth in China.

“The global economy is still facing many difficulties and the Australian economy remains fragile.”

He noted that the strength of the Australian dollar and less favourable markets posed significant challenges.

US Home Prices Drop 11.3% in August

The Standard & Poor/Case-Shiller Index, measuring home prices in 20 major metropolitan areas, declined 11.3% in August from the same period a year earlier.

Economists had earlier predicted 11.9% drop.

However, prices increased 1% in August from the previous month on a seasonally adjusted basis.

Nineteen of the 20 metro areas and both composites showed an improvement in annual rates of decline with compared to July.

Gainers & Losers

Sundance Resources fell 9.4% as crude oil prices shed 2.7% to $77.5 per barrel and gold prices plunged 0.5% to $1,030 per ounce. Linc Energy tumbled 6.4% and Mincor Resources declined 7.5%.

ASX Movers

Sundance Resources Limited led the decliners in the S&P ASX 200 index with a loss of 9.3% followed by losses in ING Industrial Fund of 8.3%, in Elders Limited of 7.8%, in Macquarie CountryWide Trust 7.7% and in Independence Group NL 7.5%.

Flight Centre Limited led gainers in the S&P ASX 200 index with a rise of 3.7% followed by gains in Goodman Fielder Limited 1.8%, in GrainCorp Limited of 1.7% and in Sonic Healthcare Limited of 1.4%.

Other Movers

Australia and New Zealand Banking Group Limited decreased 2.1% to A$22.85 and said full-year net profit fell 11% to A$2.94 billion from A$3.32 billion a year ago. As higher bad debt charges and one-off tax and derivative losses offset stronger revenue.

BHP Billiton plc slipped 3.3% to A$37.13 after the mining company said striking copper miners at Chile''s Spence mine said on Wednesday there was no end in sight to a 16-day labor dispute.

Elders Limited the rural and regional company declined 7.8% to A$0.18.

Flight Centre Limited rose 3.7% to A$17.01 after the travel agency managing direct Graham Turner told shareholders, “We are currently ahead of expectations, our previous full year profit guidance of a A$125 million to A$135 million pre-tax result remains in place.""""

ING Industrial Fund fell 8.3% to A$0.50 after it completed its offering of A$474 million via an institutional placement.

Rio Tinto Limited declined 4.8% to A$60.98.

National Australia Bank Limited fell 2.6% to A$29.05.

Santos Limited the oil and gas exploration and production company decreased 2.7% to A$14.90.

Woodside Petroleum Ltd dropped 3.5% to A$46.69 as it kicks off an expensive campaign to explore for natural gas in Western Australia''s offshore Carnarvon basin.