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Market Update

Australian and Emerging Markets Continued Downward Slide

Author: Marcus Jacob
Last Update: 10:00 AM ET January 30 2014

4:30 PM Sydney Australian stocks were swept lower with the emerging markets weakness and the Aussie dollar declined further. Home sales in Australia jumped 14.4% in 2013 and import and export prices in December eased 0.5%.

Australian stocks eased following a sharp decline in Asian markets and emerging markets continued to drift lower.

Market sentiment was further dented after the U.S. Federal Reserve followed up on its promise to taper its unusually large monetary stimulus by $10 billion from the next month to $65 billion.

The Fed after a 2-day meeting decided to stick to its plan and did not comment on the rising tensions in the emerging markets and currencies of developing nations.

Despite the tapering plan, the Fed is likely to pump additional $450 billion in the economy in the current year before it stops the government debt purchases by the end of the year.

The Australian Bureau of Statistics reported imports and exports prices in December eased to 0.5% but remain stronger than 2013.

The Housing Industry Association reported new home sales in 2013 jumped 14.4% from a year ago.

Australian dollar fell to 87.28 U.S. cents and in stock market trading turnover edged up to 721 million shares worth $4.5 billion.

The ASX 200 index slipped 40.90 or 0.8% to close at 5,188.10 and the broader All Ordinaries decreased 41.20 to 5,199.40.

Stocks in Review

Rio Tinto closed unchanged at $65.80 and BHP fell 18 cents to $36.69.

Woodside Petroleum Limited slumped 36 cents to $37.49.

Westpac decreased 31 cents to $30.89 and ANZ fell 1.1% to $30.05 and yesterday the mortgage lender confirmed that the bank overcharged interest payment of $70 million to customers and plans to repay the amount.

Billabong International Limited declined 4% to 59.5 cents after the investor approved $135 million share issue to take 40.8% stake by the US hedge funds Oaktree Capital and Centerbidge Partners in the company.

Beach Energy Ltd dropped 2.1% or $1.40 after the Australia-based oil and gas explorer reported revenue in the third-quarter ending in December surged 66% to $286.8 million from $173 million a year ago period.

Hills Limited jumped 2.3% to $1.75 after the electronics products maker signed agreements to sell its Fielders and Orrcon steel businesses to BlueScope Steel Limited for $87.5 million.

Shares of BlueScope Steel Limited slid 0.9% to $5.45.

Navitas Ltd climbed 2.2% to $6.57 after the education services provider reported its net profit rose 3% to $36.1 million. The company said numbers of student dropped in its Asia and African colleges.

Treasury Wine Estates Limited tumbled 20% to $3.64 after wine maker lowered its full-year earnings forecast by $40 million. The company reduced its operating earnings estimates between $190 million and $210 million from the earlier range of $230 million to $250 million.

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