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Market Update

Australian Indexes Soar 1%, James Hardie Surges 6%

Author: Marcus Jacob
Last Update: 9:05 AM ET May 22 2014

5:00 PM Sydney – Australian market indexes closed higher after the latest private manufacturing survey showed a slight uptick in activities. Investors also bid up stocks after Fed estimated low interest rates to continue in the near future. James Hardie, the building products maker soared after annual net income doubled.

Australian market indexes closed higher following better than expected news on manufacturing in China and the U.S. Fed hinting low interest rate regime to continue for the near future.

ASX 200 index closed up 55 or 1% to finish at 5,480 and in trading 727 million shares changed hands worth $4.35 billion.

Australian dollar gained to close at 92.60 U.S. cents and market indexes in Hong Kong added 0.6% and in Tokyo advanced 1.6%.

U.S. Fed Estimates Low Rates

U.S. Fed in its policy statement at the conclusion of two-day meeting yesterday estimated moderate economic recovery to continue and inflation is within the target set by the central bank.

The central bank also reiterated its plan to taper and terminate its new bond buying before the end of the year. The policy makers also began discussing new measures and options and impact of higher interest rates on the economy.

The Fed statement indicated that low rates are likely to continue in the near future and additional stimulus measures could improve labor market without stoking inflation. However, the Fed did not announce any new measures.

China Manufacturing Index Improves

The private manufacturing survey in China showed a slight uptick in activities but overall sector growth is still contracting.

The HSBC flash Purchasing Manager’s index increased to a five-month high of 49.7 from revised 48.1 in April.

Any reading below 50 indicates a contraction and the private survey includes government and private sector companies.

Stocks in Review

Aveo Group closed unchanged at $2 and the retirement village operator acquired two new sites to accelerate new development projects.

BHP Billiton Limited increased 1.3% to $37.65 and global miner and the third largest iron exporter in the world reiterated its growing concern over the planned strike of tugboat workers at Port Hedland in Western Australia.

Caltex Australia Limited gained 1.8% or 40 cents to $22.30 and won a regulatory approval from for its proposed acquisition of the fuel division of Scotts Group.

Dick Smith Holdings Limited closed unchanged at $2.14 and the retailer said it is on track to meet its full-year outlook.

James Hardie Industries plc soared 5.7% to $14.47 after the building products maker reported annual net income of $99.5 million compared to $45.5 million in the previous year.

The company also increased its dividend and issued positive outlook for the current year earnings.

PM Capital Asian Opportunities Fund Limited began trading on the stock exchange for the first time today and the issue was priced at $1 a share and closed at 96 cents.

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