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Market Update

RBA Reiterated Rate Outlook, David Jones to Review Myer Merger

Author: Marcus Jacob
Last Update: 1:04 PM ET March 18 2014

5:00 PM Sydney – Australian market indexes closed higher after the release of latest RBA minutes of meeting. The policy committee reiterated it low interest rate outlook for the foreseeable future and cited weak labor market conditions and weakening foreign exchange rates.

Australian market indexes closed 0.5% higher and the dollar traded near a two-month low after the RBA minutes of meeting reiterated current interest rate outlook for the foreseeable future.

The Reserve Bank of Australia reiterated its current outlook on cash rate according to a minutes of March meeting released today. The policy committee statement highlighted the weak labor markets and weakening trend in exchange rate.

The central bank noted that the cash rate will stay at its current level of 2.5% ‘‘for some time if the economy was to evolve broadly as expected.’’

Australian dollar closed at 90.54 U.S. cents and stock market trading turnover jumped to 730 million shares worth $4.2 billion.

The ASX 200 index increased 27 or 0.5% to 5,344.60 and the broader All Ordinaries gained 25 to 5,360.20.

Stocks in Review

Rio Tinto gained 57 cents to $61.85. BHP increased 60 cents to $36.07. Woodside Petroleum Limited slid 2 to $37.99.

Westpac Banking Corp added 5 cents to $33.59 after bank’s chief economist, Bill Evans, revised the forecast on interest rates of 2.5% will be unchanged for the remainder of 2014.

Automotive Group Holdings Ltd soared 4.3% to $3.65 on media reports that the company is in talks to sell its retail subsidiary Covs.

David Jones Limited increased 1.2% to $3.33 after the department store operator said it will review the $3.4 billion merger proposal with Myer Holdings Ltd before entering into negotiations with the rival.

The department store chain announced it has hired management consultant Port Jackson Partners to review a possible merger with the rival Myer.

The newly appointed chairman Gordon Cairns said the review from a third party will help the company in evaluating potential merger benefits.

Kingsgate Consolidated Limited closed unchanged at $1.296 and the company is preparing to raise between $39.2 million and $59.4 million to fund its projects.

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