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Market Update

Australian Indexes Reverse Gains to 0.7% Loss Ahead of Rate Decision

Author: Marcus Jacob
Last Update: 9:24 AM ET June 01 2015

5:30 PM Sydney Australian market indexes traded lower and property stocks closed down and investors digested several economic data. Home prices fell for the first time in six months in May and domestic manufacturing activities expanded in the month.

Australian market indexes jumped 1% at the opening but closed down 0.7% ahead of interest rate decision tomorrow.

The government data showed company profits increased in the March quarter and home prices fell for the first time in six months in May and a private measure of inflation showed that the inflation index is within the target range set by the central bank.

The seasonally adjusted estimate for total building approvals declined 4.4% to 18,715 in April following a rise of 2.9% in the previous month but surged 16.3% from a year ago month, the Australian Bureau of Statistics said.

On a yearly basis, building approvals soared 16.3% from a year earlier and upwardly revised by 24.6% climb in the previous month.

The seasonally adjusted estimate for private sector houses in April jumped 4.7% to 10,130 and the value of residential building declined 3.5% from 4.7% increase in March.

Separately the department said seasonally adjusted company operating profits in the first-quarter jump 0.2% after 0.2% decrease in the fourth quarter. On a yearly basis, profits declined 7.5%.

Manufacturing sales in the quarter dropped 4.1% and plunged 5.1% from a year ago period but wholesale trade sales jumped 1.9%.

Australian dollar closed at 76.52 U.S. cents and in stock trading turnover slumped to 602 billion shares worth $4.2 billion.

At close, the ASX 200 Index slipped 41.80 or 0.7% to 5,735.40 and the broader All Ordinaries Index dropped 40.90 to 5,734.

In commodities trading, gold rose US$3 to US$1,191 an ounce and Brent crude fell 0.44 cents to close at US$65.12 a barrel.

Australian Stock Movers

Adslot Ltd declined 4.5% to 10.5 cents after the online advertising company signed a contract for Symphony with Germany-based media conglomerate Goldbach Digital Services AG.

Paladin Energy Ltd closed unchanged at 31.5 cents after the uranium producer agreed to acquire Carley Bore uranium deposit in Western Australia from Energia Minerals Limited for about $15.8 million.

Watpac Limited climbed 3% to 84.5 cents after the mining construction company secured contract worth $55 million to build a secure building facility for the Reserve Bank of Australia.

UGL Limited surged 10.3% to $2.56 after the engineering services provider said as of May order book size was $5.1 billion and forecasted total revenues for the fiscal 2015 of about $3.1 billion and operating profit will be near to $75 million.

UGL added excluding DTZ, revenues for fiscal 2015 will be $2.3 billion and operating earnings of $47 million.

For fiscal 2016, the company said estimated revenue to be flat at around $2.3 billion due to the benefits from its restructuring and efficiency review and annual cost savings of $33 million from 2015-16 onwards due to reduction of 200 jobs.

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