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Market Update

ASX Drops 2.3%; Commonwealth, News Corp, Woolworths Fall

Author: Marcus Jacob
Last Update: 10:25 AM ET May 06 2015

5:30 PM Sydney Australian market indexes plunged more than 2% on weak corporate results and retail sales were rose less than expected in March. Commonwealth Bank dropped on flat third-quarter cash profit. News Corp posted weak quarterly sales. Australian Securities Exchange revenues rose 4%.

Australian market indexes plunged on weak results from Commonwealth Bank, Woolworths Limited and News Corp and retail sales rose less than anticipated.

The dollar dropped after the rate cut decision to 77.88 U.S. cents but quickly recovered to as high as 79.50 U.S. cents.

The seasonally adjusted retail sales in March jumped 0.3% followed by 0.7% increase in February, the Australian Bureau of Statistics reported today.

The department added the largest contributor to the retail sales increase was from department stores clothing, footwear and personal accessory retailing.

The seasonally adjusted new home sales in March climbed 4.4%, the highest in four-years and multi-unit sales surged 11.3%, the Housing Industry Association said.

Australian dollar closed at 79.66 U.S. cents and in stock trading turnover climbed to 935 million shares worth $7 billion.

At close, the ASX 200 Index declined 134.30 or 2.3% to 5,692.20 and the broader All Ordinaries Index dropped 125.30 or 2.2% to 5,690.90.

In commodities trading, gold gained US$5 to US$1,190 an ounce and Brent crude gained 0.95 cents to close at US$68.47 a barrel.

Australian Stock Movers

ASX Limited dropped 2.5% to $42 after the Australian Securities Exchange operator said revenues in the nine-month ending in March climbed 5.8% to $516.8 million form $488.4 million in a year ago period.

Net profit in the period jumped 4.1% to $298.7 million compared to $286.9 million in the same period a year ago

Commonwealth Bank of Australia plunged 5.8% to $82.98 after the banking and financial services provider reported revenues in the quarter ending in March similar to fiscal first-half as group net interest margin continued to be impacted by competitive pressures.

The lender said unaudited net profit for the three months to March was nearly flat at $2.2 billion from $2.3 billion in a year ago period and total loan impairment expense in the quarter was about $256 million.

iiNet Limited slumped 2.8% to $9.72 after the internet and telephony services provider recommended its shareholders to accept a takeover bid of $1.57 billion from TPG Telecom, after rival M2 Group Limited lowered its bid to $1.57 billion.

News Corp declined 3.9% to $19.41 after the media conglomerate reported revenues in the third-quarter ending in March slipped 1% to $2.06 billion from $2.08 billion in a year ago period.

Net profit in the quarter tumbled 52.1% to $23 million compared to $48 million and diluted earnings per share dropped to 4 cents from 8 cents in the same period a year ago.

Total advertising revenues within the division plunged 12% mainly due to weak print advertising and lower revenues at News America Marketing.

Book publishing segment revenues in the quarter soared 14% and revenues from online real estate business surged 67%.

Ramsay Health Care Limited dropped 3.1% to $61.24 after the hospital operator lifted its profit forecast for the year after its core net profit for the first-half of the year jumped 19.1% to $204.4 million.

For the year, the company forecasted net profit growth between 18% and 20% from the earlier estimated range between 14% and 16%.

Woolworths Limited plunged 5% to $28.14 after the supermarket operator said sales in the third-quarter ending on April 5 dropped 1.6% to $14.96 billion from $15.19 billion in a year ago period.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc