Pace of economic growth slowing, Westpac index reveals: Economy Roundup
The result indicates the RBA's next move for interest rates may not come until the second half of the year.
The index grew by 3.2% in November, down from 3.5% in October, with Westpac chief economist Bill Evans saying it is only slightly above trend and doesn't match with expectations that the economic slowdown will pick up as jobs growth grows.
"The slowdown in the annualised growth rate since the middle of 2010 has been remarkable," Evans said. "The rate is now half compared to just four months ago."
Now, Evans says Westpac does not expect another interest rate rise until the September quarter.
"The stronger likely growth profile in the second half due to the rebuilding program points to upside rate risks in the second half," Evans said.
The level of the leading index increased from 278.3 points to 278.4 points, with two of the four monthly components falling in November.
Downer EDI shares down nearly 20%
Downer EDI shares have dropped over 19% this morning to $3.65 after the company said it would continue its commitment to the Waratah train project.
The engineering services company announced a $250 million provision, more delays and a management change to the project.
It also said that EBIT will come in at $132 million for the six months to December 31, compared to the first half profit of $87 million.
However, Downer also said other areas of the business are continuing to perform well.
Telstra to gain $150 million in restructure plan
Telco giant Telstra will see a gain of $150 million due to a new agreement that will allow it to restructure its Hong Kong joint venture, Reach.
The company has said that it signed a new agreement with PCCW which will allow it to divide the majority of Reach's international assets between the two firms.
Telstra said the restructure will give it greater control to deliver new services to businesses and service provider customers.
Macarthur production still down due to floods
Macarthur Coal has said the wet weather in Queensland is still affecting its operations, with the company recording a 20% drop in sales for the December quarter.
The company has said that while operations are returning to average capacity, it is suffering from "significant delays" due to the weather.
The firm remains subject to force majeure, which was declared on December 3.
Shares flat despite Wall Street reaching two year high
Shares have opened flat this morning despite receiving a solid lead from Wall Street overnight, where stocks have reached a two-and-a-half year high after the Fed announced the continuation of a bond buyback scheme.
The benchmark S&P/ASX200 index was down 1.01 points or 0.02% to 4806.8 at 12.10 AEST, while the Australian dollar remained firm at US99c.
AMP shares gained 1.5% to $5.28, while Commonwealth Bank shares also rose 0.3% to $52.75. NAB lost 0.2% to $24.72 as ANZ also lost 0.2% to $23.56.
Wall Street hits 29-month high on Fed announcement
American stocks closed at a 29-month high overnight, with investors encouraged by comments made during President Obama's State of the Union address.
They largely ignored the announcement by the Fed that it would continue in a bond buyback scheme.
The Dow Jones Industrial Average gained 8.25 points or 0.07% to 11,985.44.