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Market Update

Australia Estimates Higher Deficit and Slower Economic Growth

Author: Marcus Jacob
Last Update: 9:20 AM ET August 02 2013

5:00 PM Sydney Australian indexes soared 1.1% tracking gains in international markets. Labor government revised fiscal year deficit to rise to $30 billion and economic growth to slow to 2.5% and unemployment to surge to 6.25%.

Australian stocks surged at the opening following record market indexes close in New York.

The Labor Government in a mini-budget offered cautious view on the economic growth, employment and estimated a sharp jump in deficit.

The budget deficit is expected to soar to $30.1 billion from $18 billion and estimated in May on falling revenues.

The economic growth in the nation is expected to slow down to 2.5% from the previous estimate of 2.75% and the unemployment rate is expected to surge to 6.25% from 5.75%.

Separately, Australian Bureau of Statistics said producer price index in the second quarter to June increased to 0.1% from the previous quarter and jumped 1.2% from a year ago quarter.

Also, the statistical agency said international arrivals surged in June 7.6% after rising 0.6% in May and declining 1.8% in April.

The ASX 200 index jumped 55.30 or 1.1% to close at 5,116.80 and the broader All Ordinaries gained 51.60 to 5,098.70. For the week end, ASX 200 gained 1.5%.

Australian dollar declined to 89.19 U.S. cents and in stock trading turnover slipped to 729 million shares worth $4.1 billion.

Stocks in Review

Rio Tinto climbed $1.37 to $59.31 and BHP increased 58 cents to $35.75. Woodside Petroleum Limited gained 67 cents to $38.26.

David Jones Limited slid 3 cents to $2.67 and Breville Group fell 3 cents to $7.72. Woolworths added 6 cents to $33.57.

Mirvac Group lowered 2 cents to $1.62. Lend Lease rose 3 cents to $9.02.

Westpac jumped 59 cents to $31.46 and Commonwealth up 0.9% to $73.82. National Australia Bank increased 44 cents to $31.17 and ANZ gained 53 cents to $29.92.

OrotonGroup Limited plunged 7.1% to $6.80 after the apparel and leather goods retailer expects earnings for the year before interest and tax of around $40 million, an increased from $37.8 million a year earlier.

For the fiscal 2014, the retailer expects EBIT in the range of $23 million to $25 million. The company plan to open stores in Shanghai, Hong Kong and Dubai before this Christmas.

ResMed Inc. jumped 2.4% to $5.45 after the medical equipment maker revenues in the fourth quarter ending in June climbed 11% to $414.6 million from a year ago. Net income for the quarter fell $73 million or 50 cents per diluted share.

Westfield Group slid 0.3% to $11.30 after the construction said dividend for the first-half ending in June to pay 25.5 cents and will be paid on August 30.

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