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Market Update

Australian Home Sales Rise 1.2%, QBE Insurance Lowers Earnings Outlook

Author: Marcus Jacob
Last Update: 9:53 AM ET July 29 2014

5:00 PM Sydney, Australia Australian market indexes closed higher after declining for two days in a row. Home sales in June increased 1.2% and added 2% in the quarter to the month. QBE Insurance said first-half results will be impacted by weakness in Latin America.

Australian market indexes turned positive after two days of losses and new home sales in June met expectations and a private measure of consumer confidence index showed an increase.

The Housing Industry Association said new home sales in June jumped 1.2% from May and for the quarter to the month sales increased 2%.

Single family home sales declined 1% but multi-unit structures sales soared 15.9%.

Australian dollar closed at 94.01 U.S. cents and stock trading turnover rose to 581 million shares worth $3.66 billion.

ASX 200 index rose 11 or 0.2% to 5,588.40 and the broader All Ordinaries gained 10.70 to 5,580.60.

Stocks in Review

ALS Ltd plunged 6.5% to $7.50 after the mining testing and inspection service provider forecasted underlying net profit-after-tax for the first-half ending in September to decline 27% to $74 million from a year ago period.

Monadelphous Group Limited slipped 1.1% to $15.93 after the diversified service provider secured an iron ore construction contract with Sino Iron Pty Ltd in Western Australia for about $160 million.

QBE Insurance Group Ltd tumbled 11.1% to $10.57 after the insurance company said total written premium for the first-half likely to decline to $8.5 billion from $9.4 billion the year earlier period.

The company estimated net profit-after-tax for the first-half near $390 million from $477 million in the year ago period.

QBE said the result were dented by the additional reserve of $170 million in Latin America and higher-than-expected large individual risk claims in Latin America as well as an adverse discount rate of about $120 million in the region excluding Argentina.

The company said insurance profit margin for the first-half is expected between 7% and 8%, down from 10.8% a year earlier period.

Worleyparsons Limited slid 0.3% to $18.02 after the engineering service provider won a two-decade long contract from Woodside Petroleum Limited for engineering, procurement and construction management in Western Australia.

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