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Market Update

With Rates on Hold, Bargain Hunting Drives Australian Stocks Higher


Author: Marcus Jacob
ticker.com
Last Update: 9:42 AM ET December 01 2015

5:30 PM Sydney, Australia – The Reserve Bank of Australia left the official cash rate unchanged at historic low 2% and held out for a possible rate cut in 2016. Building approvals increased 3.9% in October. ASX 200 index soared 1.9%.

Bargain hunting and positive economic news drove Australian markets higher on Tuesday after losses in BHP Billiton, Slate & Gordon, and Dick Smith in the previous session.

BHP Billiton jumped 3.7%, Slater and Gordon recouped 28%, and Dick Smith Holdings surged 25%.

The Reserve Bank of Australia kept interest rates on hold at a record low of 2%, as inflation still hovered below the central bank’s target range of 2% to 3%.

The central bank didn’t exclude the possibility for another rate cut in 2016 and cited weakening global scenario for commodities market.

Building approvals increased 3.9% in October to 19,652, following an increase of 2.2% in September, according to the Australian Bureau of Statistics. The data exceeded beats market and analyst projections.

Current account deficit in the third quarter narrowed down to $18.10 billion from $20.5 billion in the second-quarter.

The Australian dollar slid to 72.62 U.S. cents and stock trading turnover slid to 1.08 billion shares worth $6.2 billion.

At the close, the ASX 200 Index jumped 99.60, or 1.9%, to 5,266.10, while the broader All Ordinaries Index increased 94.40 to 5,312.60.

In commodities trading, gold soared US$14 to US$1,071 an ounce and Brent crude future for immediate month delivery added 16 cents to US$44.77 a barrel.

IPO

8IP Emerging Companies Limited closed unchanged at $1 after the mortgage broker priced its initial public offering at $1 a share

Australian Stock Movers

Freedom Foods Group Ltd gained 1.9% to $3.12 after the food producer completed the acquisition of rival cereal and snack producer Popina Foods.

Decmil Group Limited slumped 3.7% to 91 cents after the mining, infrastructure, oil and gas services provider agreed to acquire telecommunication company SC Holdings Pty Ltd for about $14 million.

QMS Media Ltd was halted at $1.19 after the media and advertising company announced plans to acquire New Zealand-based rival iSite for about $44.4 million.

The company plans to raise $50.3 million to fund the acquisition, a 1-for-5 accelerated non-renounceable pro rata entitlement offer for $41 million, and a retail entitlement offer for another $9.3 million.

iSite has 450 billboards, presence on more than 1,500 buses in New Zealand, and a growing digital billboard portfolio.

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