Sydney, Dec 12, 2008 AEST (ABN Newswire) - Overnight US stocks declined on a big rise in unemployment claims and a surprising jump in the US trade deficit. Investors also worried about the fate of a 15-billion-dollar rescue plan for the troubled US auto industry, which could face a roadblock in Senate.
Yesterday the Australian shares ended lower as traders looked to make short-term gains, despite a positive start in the morning. The benchmark S&P/ASX200 share index yesterday lost 1.2%, or 42.7 points, to 3598, while the All Ordinaries index shed 1.1%, or 39.1 points, to 3534.2. But today resource stocks may gain after commodity prices advanced.
On the Sydney Futures Exchange, the December Share Price Index futures contract was recently down 37 points at 3,550.
The Australian dollar opened 1.74 per cent firmer as bleak jobs and trade reports indicate a deepening US recession and hitting the American currency. At 0700 AEDT, the Australian dollar was trading at $US0.6708/11, up from Thursday's close of $US0.6591/95.
Oil prices rose nearly 12 per cent Thursday as the dollar continued to lose value, making commodities like crude more attractive. Light, sweet crude for January delivery rose $US5.08 to $US48.60 a barrel in trading on the New York Mercantile Exchange.
Key Economic Facts and Figures
Figures released by Australian Bureau of Statistics yesterday show that 15,600 jobs were shed last month, pushing the unemployment rate up 0.1 percentage points to 4.4, the same as in November last year. The jobless rate has risen to its highest level in a year as a result of the severe economic slowdown. But economists expect the rate to climb more rapidly over coming months.
Australia's consumers expect inflation to fall sharply in the coming year, a survey by Melbourne Institute showed on Thursday, suggesting plenty of scope for further cuts in interest rates to support the ailing economy. The Melbourne Institute said its December survey found respondents expected consumer price inflation to slow to an annual 2.5% over the next 12 months, down from 3.3% in October.
M&A News
Australian oil and gas producer Santos Ltd(ASX:STO) has distanced itself from exposure to liability claims related to a mud-flow disaster in Indonesia after selling its minority stake in the gas project. The company said it would pay A$22.5 million and transfer its 18 percent stake in its Indonesian Brantas production sharing contract to a company tied to the contract operator, Lapindo Brantas Inc.
The not-for-profit organisation YMCA, which already operates about 20 child-care centres across the country, said yesterday that it had capacity to take on up to 100 more ABC Learning(ASX:ABS) childcare centres.
Bank of Queensland(ASX:BOQ) said yesterday that the company would look at potential acquisitions and mergers in 2009 similar to its recent takeovers of Western Australia's Home Building Society and Queensland's Pioneer Building Society, as the regional lender aims to take the places vacated in the market by St George(ASX:SGB) and BankWest.
Important Corporate News
Goodman Group (ASX:GMG) said Thursday that it will update the carrying value of its investment in ING Industrial Fund (ASX:IIF) at Dec. 31 in its fiscal half year results, which it will post in February. Goodman Group chief executive Greg Goodman has answered speculation that Goodman will sell down its share in ING by stating there was no intention to sell.
The Federal Court of Australia has ordered national carrier Qantas Airways(ASX:QAN) to pay A$20 million in pecuniary penalties for breaching the price-fixing provisions of the Trade Practices Act.
The world's largest drilling company, Boart Longyear(ASX:BLY), will slash 67 manufacturing jobs in Adelaide as the global crisis hits the mining sector.
Indophil Resources NL (ASX:IRN) said Friday it's still working on the sale of its 34.2% stake in the copper-gold Tampakan project in the Philippines, but that a key mine study was delayed.
Westpac(ASX:WBC) says its executives responsible for writing $400 million in loans to Allco Finance and ABC Learning Centres will remain in their jobs while the bank faces 2009 with an expectation of rising bad debts.
Radio broadcaster Austereo Group(ASX:AEO) yesterday has launched its new digital network Radar, the country's first commercial digital station.
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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