4:30 PM Sydney – Australian government deficit is expected to be three times larger than previously estimated and it will be at least three more years before the federal budget returns to surplus. Reserve Bank of Australia sought additional weakening of the Aussie dollar.
Stocks in Australian trimmed gains after the government estimated nearly tripling of budget deficit in the current year and said it will be three more years before the budget returns to surplus.
Australian dollar fell to 89.43 U.S. cents. Stock trading turnover declined to 713 million shares worth $3.4 billion.
The ASX 200 index gained 13.60 to close at 5,103.20 and the broader All Ordinaries rose 13 to 5,106.01.
The Reserve Bank of Australia reiterated its commitment to lower the Aussie dollar and sought balanced economic growth.
The central bank in a note after a policy minutes of meeting said the currency has depreciated “noticeably” in the last one month and early signs of economic revival were evidenced after the recent cut in interest rates.
However, central bank is seeking additional currency depreciation to achieve more balanced economic growth.
Australian federal government budget deficit is expected to be nearly three times larger than estimated by the previous government in the current fiscal year.
Treasurer Joe Hockey said in the mid-year review that the fiscal year deficit is expected to reach $47 billion compared to the estimate of $18 billion expected by former Treasurer Wayne Swan.
The federal deficit is now expected to shrink to $33.9 billion in the next fiscal year and the budget is not likely to return to surplus before fiscal 2017.
Pact Group Holdings Limited priced its offering at $3.80 a share and closed at $3.32 after the share opened at $3.50.
GDI Property Group Limited priced its offering at $1 a share and closed at 88 cents after the stock opened at 95 cents.
Stocks in Review
Rio Tinto increased 39 cents to $65.30 after the miner secured commitments from banks to agree finance the underground expansion of the Oyu Tolgoi copper and gold mine in Mongolia.
BHP closed unchanged at $35.66 and the oil and gas explorer suspended production at the underground mine at its nickel operations in Western Australia where an earthquake had struck in October. BHP will continue to operate its processing facility at Leinster Preserve Underground mine.
Nearly 200 jobs are expected to be eliminated.
Woodside Petroleum Limited rose 8 cents to $37.30 after the Nomura Holdings said the Shell, the largest oil firm in Europe may divest 23% stake it holds in Woodside that is worth $6.4 billion.
Westpac gained 10 cents to $30.87.
declined 3.6% to $6.13 after the energy infrastructure developer agreed to acquire Australia-based natural gas distribution company Envestra Ltd. after sweetening its takeover bid to $1.17 a share.
In July 2007, the company acquired 17.2% stake of Envestra and now holds 33% stake and the lead investor in the company.
Shares of Envestra Limited climbed 4.7% to $1.12.