Australian Market Ends Higher On Steady Jobless Rate

By @ibtimes on

RTTNews - The Australian market ended in positive territory following surprise unemployment report released by the Australian Bureau of Statistics which revealed that unemployment remained unchanged at 5.8% in July, contrary to expectations of a rise to 6.0% by economists. Speculation of a rate hike sooner-than-expected following upbeat unemployment report lifted market sentiment amid increasing confidence of a turnaround in the economy. Banks and mining stocks led the gains.

The benchmark S&P/ASX200 Index rose 61.80 points, or 1.45%, to 4,326, and the All-Ordinaries Index ended with a gain of 1.38% or 58.80 points, at 4,331.

In the U.S., stocks ended moderately lower following weak economic data on private unemployment and unexpected contraction in service sector activity raising concerns about the health of the economy. However, unexpected rise in factory orders and underlying confidence of recovery amid satisfactory earnings of companies attracted some late-buying interest and limited the losses.

The Dow closed down by 39.22 points or 0.4% at 9,281, the Nasdaq slipped by 18.26 points or 0.9% to 1,993 and the S&P 500 fell by 2.93 points or 0.3% to 1,003.

On the economic front, the Australian Bureau of Statistics revealed that job rate in the country remained unchanged in July compared with June. The jobless rate for the population aged 15 years and over stood at a seasonally adjusted 5.8% in July, unchanged from the previous month. Economists expected the rate to climb to 6%. A year ago in July, the jobless rate was only 4.3%.

The surprise steady unemployment rate raised speculation that the Reserve Bank of Australia might have to raise the interest rates as early as next month from its present rate of 3.00%.

Banks and commodity stocks led the rally. Commodity prices rose in the international market on Wednesday in increasing confidence of a pick-up in demand amid recovery prospects.

Light sweet crude oil price for September delivery ended at $71.59 a barrel in electronic trading, down $0.38 from its previous close $71.97 a barrel in New York on Wednesday.

Alumina Ltd, a partner of U.S aluminum producer, Alcoa, reported a narrower than expected underlying loss for the first half ended 30 June. The stock price surged up 9.89%.

In the mining space, BHP Billiton gained 1.68%, Rio Tinto advanced 1.86%, Fortescue Metals surged up 4.36%, Mincor Resources rose 3.27% and Minara Resources soared 10.48%.

Banks also ended higher on expectations of interest rate hike and re-rating of the sector by analysts. ANZ Bank advanced 1.25%, Commonwealth Bank of Australia gained 2.69%, National Australia Bank added 1.26% and Westpac Banking rose 3.90%.

Mixed trading was witnessed among energy stocks. Woodside Petroleum added 0.46%, Santos advanced 0.41% and Origin Energy rose 0.97%. However, Oil Search bucked the trend and slipped 0.90%.

Gold stocks ended in negative territory. Lihir Gold slipped 2.15%, Newcrest Mining lost 1.05% and Sino Gold shed 2.01%.

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