Plus   Neg

Australian Market Trades Weak

The Australian stock market is trading weak on Thursday with investors tracking cues from Wall Street where stocks posted losses overnight following a drop in fourth-quarter GDP.

Consumer staples, energy and healthcare stocks are among the notable losers. Mining and industrial stocks are also exhibiting some weakness.

The benchmark S&P/ASX 200 index is down 17 points or 0.4 percent at 4,879.7. The broader All Ordinaries index is trading at 4,901.6, down 17.5 points or 0.4 percent from its previous close.

Whitehaven Coal is down more than 6 percent following a profit warning by the company. The company warned that its first-half earnings could slump to less than A$10 million as weak coal markets and the high Australian dollar take their toll.

ResMed Inc. (RMD) is trading lower by 6.8 percent. Lynas Corp., Atlas Iron, Myer Holdings and Leighton Holdings are down 2 to 4 percent.

Woolworths Ltd. shares are down 1.8 percent. The company announced that it has made A$30.7 billion in first-half sales, up 3.2 percent on the previous corresponding period.

PanAust, Metcash, Arrium, Monadelphous Group and Woodside Petroleum are also trading notably lower.

Perseus Mining is trading higher by 3.3 percent. Carsales.Com, Computershare, Seek, James Hardie Industries, Aristocrat Leisure, Sims Metal Management and Adelaide Brighton are up 1.3 to 2.3 percent.

On the economic front, the total number of new homes sales in Australia was up 6.2 percent on month in December, the Housing Industry Association said Thursday - rising for the third consecutive month and accelerating from the 4.7 percent gain in November.

By region, new home sales added 12.2 percent in Western Australia, 7.1 percent in New South Wales, 6.0 percent in Victoria and 3.8 percent in Queensland. Sales were down 1.8 percent in South Australia.

For the fourth quarter of 2012, new home sales added 3.3 percent on quarter but were down 12.7 percent on year.

According to a report from the Australian Bureau of Statistics, the export price index in Australia was down 2.4 percent compared to the previous three months in the fourth quarter of 2012. That missed forecasts for a 1.5 percent decline following the 6.4 percent contraction in the third quarter.

Import prices were up 0.3 percent on quarter in Q4, the bureau said - versus forecasts for an increase of 0.4 percent after declining 2.4 percent in the three months prior.

Meanwhile, the overall amount of credit extended to private sector recipients in Australia increased in December by 0.4 percent over November, the Reserve Bank of Australia reported. For the full year to December, overall private sector credit rose 3.6 percent.

In the currency market, the Australian dollar opened lower amid speculation about further interest rate cuts. In early trades, the local unit was quoting at US$1.0409, down 0.6 percent from Wednesday's close of US$1.0473.

On Wall Street, stocks ended modestly lower Wednesday following the Federal Reserve's latest monetary policy announcement and an unexpected fall in GDP in the fourth quarter. The Federal Reserve, which said growth in economic activity has paused in recent months due largely to weather-related disruptions and other transitory factors, kept interest rates unchanged.

The major averages climbed off their lows going into the close but still ended the day in the red. The Dow ended down 44 points or 0.3 percent at 13,910.4, the Nasdaq dipped 11.3 points or 0.4 percent to 3,142.3 and the S&P 500 slid 5.9 points or 0.4 percent to 1,502.

Major European markets too closed weak on Wednesday. While the U.K.'s FTSE 100 index dipped by 0.3 percent, the German DAX index and the French CAC 40 index both ended the day down by 0.5 percent.

U.S. crude oil settled higher on Wednesday, as the dollar continued to weaken against some major currencies with continued fears of supply disruptions from the Middle East due to the geopolitical tensions in Algeria and Egypt. Crude for March delivery gained $0.37 or 0.4 percent, to close at $97.94 a barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

Follow RTT