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Market Update

Australian Indexes Fall, QBE in Focus on Oklahoma Tornado Losses

Author: Marcus Jacob
Last Update: 8:06 AM ET May 21 2013

5:00 PM Sydney Reserve Bank of Australian said constrained credit growth and weakening inflation provided a backdrop for the latest rate cut. However, Boart Longyear joined other mining contractors lowered profit outlook. Stockland is exploring $400 million offering.

Australian indexes closed lower and resource stocks led the decliners. Boart Longyear joined other mining contractors in lowering profit outlook and axed 1,000 jobs. QBE faces as much as $3 billion in insured losses linked to Oklahoma tornado.

The Reserve Bank of Australia after cutting its benchmark interest rate to a record low this month, said in a minutes that inflation outlook provided further scope of easing monetary policy and the subdued credit growth provided the backdrop for the latest rate cut.

The ASX 200 index slipped 28.90 or 0.6% to 5,180 and the broader All Ordinaries dropped 29.20 to 5,156.20.

Australian dollar gained to 98.31 cents against the U.S. dollar and in stock trading turnover increased to 904 million worth $4.9 billion.

Stocks in Review

Rio Tinto slumped 12 cents to $55.30 and BHP rose 4 cents to $34.83.

Woodside Petroleum Limited declined 62 cents to $37.66.

David Jones Limited lowered 4 cents to $2.76 and Breville Group down 16 cent to $7.17. Woolworths gained 9 cents to $34.52.

Mirvac Group rose 1 cent to $1.80. Lend Lease plummeted 52 cents or 4.9% to $10.08.

Westpac fell 31 cents to $31.48, Commonwealth slid 1.4% to $72.48 and National Australia Bank decreased 0.8% to $33.09 and ANZ slipped 1.9% to $29.64.

Arrium Limited dropped 3.3% to close at 87 cents after the mineral iron oxide exporter reported year-to-date sales climbed 23% from a year earlier and for the full-year expects to sell between 8.2 mega tons and 8.4 mega tons.

Discovery Metals Limited tumbled 14 cents or 41.2% 20 cents after the mining and exploration company looking for a buyer. China based Cathay Fortune, a private equity suitor lowered its offer to 35 cents to 40 cents per share from its previous rejected offer of $1.70 per share a year ago.

Transfield Services Limited plunged 30.5 cents or 23.9% to 97 cents after the Australia based infrastructure developer expects after-tax net profit for the year to drop between $62 million and $65 million compared to current guidance estimated in the range of $85 million to $90 million.

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