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Market Update

Australian Retail Sales Rise, Rates on Hold

Author: Marcus Jacob
Last Update: 8:55 AM ET October 01 2013

4:45 PM Sydney Australian stocks traded lower and Reserve Bank of Australia left its reference rate at 2.5%. Home price index in capital cities increased 1.6% in September and new home sales rose 3.4% in August. Australian retail sales rose 0.4%.

Stocks in Sydney trading closed lower for the second day of this week and the RBA left key rates on hold for the second month in a row.

The Reserve Bank of Australia left its benchmark rate at 2.5% for the second month in a row stoking speculation that low rates are supporting more economic activities.

The ASX 200 index declined 12 points to 5,207.07. In trading, 603 million shares changed hands worth $3.6 billion and banks and BHP led the most actively traded list.

Investors also noted after the U.S. government shut down and 800,000 federal workers were temporarily laid off as lawmakers of both partied failed to agree on budget.

Budget negotiations are expected to tense and protracted and debt ceiling approaches and the U.S. government is expected to run out of money by October 17.

Retail Sales Rise

Australian retail sales in August increased 0.4% to $21.92 billion after rising 0.1% in July, the Australian Bureau of Statistics said in a report today.

Home Sales and Prices Gain

New home sales in August increased 3.4% after falling at 4.7% in July, the Housing Industry Association said today in a monthly report.

Capital city home prices rose in September according to the data released by RP Data Rismark. The home price index in capital cities increased 1.6% and median home prices in Sydney and Melbourne increased to $500,000.

Stocks in Review

Leighton Holdings Limited gained after the company won a contract to build a terminal at Melbourne Airport.

Poseidon Nickel Limited extended losses for the second day in a row and plunged 24% to 11 cents and the company appointed Fortescue non-executive director Herbert Scruggs after billionaire Andrew Forrest stepped down.

Forrest owns 30% stake in the company and gave additional 12 months to repay $8 million loan.

Silver Lake Resources Limited declined 2.5% despite the gold miner reported record gold sales from its mines in Eastern Goldfields and Murchison districts in Western Australia.

Transurban Group said that the company is preparing to raise 500 million euros in debt to repay short term maturities.

Virgin Australia Holdings Limited decreased 1.2% to 42 cents and the airline said domestic passenger count increased 6.5% and international count rose 10.6% in August.

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