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Market Update

Australian Rates on Hold, Current Account Deficit Narrows

Author: Marcus Jacob
Last Update: 9:46 AM ET June 04 2013

5:00 PM Sydney – Australian stocks closed higher and resource developers and banks led the most active list. Reserve Bank of Australia held its rate at 2.75%, a five-decade low and the dollar traded near its low of the year. Australian current account deficit narrowed more than expected in the quarter to March.

Australian stocks closed higher after the Reserve Bank left its benchmark interest rate unchanged and current account deficit fell more than expected.

The central bank held its key rate at 2.75%, a fifty year low, as expected. The decision to hold rates was influenced by the recent pick up in the property market and the weak dollar is expected to help manufacturers and exporters.

The ASX 200 index increased 13 point to close at 4,901.

Australia’s current account deficit narrowed more than expected in the March quarter to $8.5 billion from $14.7 billion in the December quarter.

Australian dollar stayed nearly flat after the rate decision at 97.31 U.S. cents and in stock trading turnover increased to 861 million worth $4.1 billion.

Stocks in Review

Billabong International Limited plunged 50% to 23 cents after the U.S. leveraged buyout firm abandoned its plan to launch a takeover offer.

The surfwear retailer also cut its earnings expectations today and said it will continue to talk to other suitors and explore its asset sale plan.

Ten Network Holdings Limited declined after the broadcasting company agreed to pay $100 million for video rights of domestic Twenty20 competition.

ISS Group Limited soared 45% after the company agreed to a takeover from the U.S. based P2 Energy Solutions for 33 cents a share.

Rex Minerals Limited soared more than 50% after the mineral developer agreed to a financing deal with a China based company to develop its Hillside Project in South Australia.

Blackwood Corporation closed at 5 cents a share after the coal exploration company said it has settled its dispute and agreed to drop legal challenge with a condition that former billionaire Nathan Tinkler makes a payment of $12 million before the year-end.

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