5:00 PM Sydney – Australian government delayed its goal of returning to a budget surplus to 2015 and revised its deficit estimate for the current fiscal year to $19.4 billion. Australia faces a possible credit rating downgrade after the latest budget estimate.
Australian stocks traded flat ahead of federal budget later in the evening.
After the market close Treasurer Wayne Swan presented preliminary budget that avoided pre-election spending and focused on returning the budget to surplus.
Swan estimated government shortfall of $19.4 billion in the current fiscal year compared to previous estimate of $1.1 billion surplus.
The ASX 200 index rose 7.90 to 5,218.20 and the broader All Ordinaries up 7.70 to 5,202.50.
Australian dollar closed unchanged at 99.84 cents against the U.S. dollar and in stock trading turnover fell to 772 million worth $4.6 billion.
Personal lending commitment increased 0.6% to $8 billion in March and business finance lending rose 1.5% to $29.64 billion, according to the data released by the Australian Bureau of Statistics.
Stocks in Review
Rio Tinto slid 4 cents to $57.55 and BHP gained 12 cents to $34.67.
BHP Billiton after the mining company intends to cut capital spending in next year to get returns from investment.
In a conference call in Barcelona, Andrew Mackenzie the new chief executive officer said, “Capital and exploration expenditure for the 2014 financial year will decline significantly, to approximately $18 billion.”
He added the company plans to cut $1.9 billion in costs when reporting first-half earnings decline of 58%.
Woodside Petroleum Limited added 4 cents to $37.39.
Macmahon Holdings Limited soared 25% to 22 cents after the mining services company reaffirmed its earnings outlook and confirmed the sale of its construction arm to Leighton is on track.
The company also confirmed its order book is $3.5 billion and additional $2.5 billion are in tenders.
David Jones Limited rose 1 cent to $2.89 and Breville Group increased 9 cents to $7.10.
Woolworths dropped 22 cents to $34.91.
Mirvac Group rose 2 cents to $1.79. Lend Lease gained 12 cents to $11.25.
Westpac fell 5 cents to $31.75, Commonwealth jumped 1.3% to $72.09 and National Australia Bank slipped 0.2% to $33.10 and ANZ fell 0.7% to $29.89.
BP Plc plans for deep-water drilling campaign at off southern Australia in late 2015 or early 2016.
Ten Network Holdings Limited fell 0.5 cents to 31.5 cents and the media company signed agreement with the International Olympic Committee to broadcast 2014 Olympic Winter Games in Russia.