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Market Update

Subdued Economic Growth in Australia

Author: Marcus Jacob
Last Update: 8:16 AM ET March 04 2015

5:30 PM Sydney Australian economic growth was subdued in the final quarter of 2014 as terms of trade worsened. Aussie dollar gained and stock trading turnover was above $5 billion. QBE and Rio Tinto traded ex-dividend.

Stocks in Australia traded lower after the latest economic growth estimate showed a smaller than expected increase in the fourth-quarter.

Stocks lacked direction in the early trading after QBE and Rio Tinto traded ex-dividend.

Seasonally adjusted gross domestic product in the fourth-quarter jumped 0.5% from the previous quarter compared to 0.4% increase in the third-quarter.

Annual rate of expansion in the fourth-quarter declined to 2.5% from 2.7% in the previous quarter, according to the data released by the statistics agency.

The terms of trade decreased 1.7%, and real gross domestic income increased 0.2%, the Australian Bureau of Statistics said today.

Australian dollar closed at 78.15 U.S. cents and in stock trading turnover dropped to 756 million shares worth $5.1 billion.

ASX 200 Index slipped 32.30 or 0.4% to 5,901.60 and broader All Ordinaries Index fell 31.40 to 5,871.50.

In commodities trading, gold slid US$1 to US$1,208 an ounce and light crude oil increased 93 cents to US$50.52 a barrel.

Brent crude decreased 23 cents to close at US$60.79 a barrel.

Australian Stock Movers

Australian Pharmaceutical Industries Ltd jumped 2.8% to $1.27 after the beauty and health products retailer forecasted net profit to surge 30% for the first-half ending on February 28 to $21 million and underlying profit to jump to $16.2 million.

Computershare Limited rose 0.5% to $12.81 after the communications software service provider signed an agreement to acquire Valiant Trust Company from Canada-based Canadian Western Bank for about $33.9 million.

FlexiGroup Limited climbed 4.3% to $3.65 after the financial services provider agreed to acquire New Zealand-based information technology and telecom equipment provider Telecom Rentals for $102.34 million.

The company also forecasted net profit for the year in the range of $90 million to $91 million.

Insurance Australia Group Ltd rose 0.7% to $5.80 and the property and casualty insurer faces claims of $90 million related to Tropical Cyclone Marcia that hit central Queensland on February 20.

Sedgman Limited soared 4.8% to 77 cents after the engineering service provider secured contract worth $18.5 million from Twin Pines Minerals to design and build a mineral sands processing plant in the U.S. with completion scheduled by April, 2016.

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