Lending falls for the first time in 16 years, Australian shares slip, US job data gets worse: Economy Roundup

Credit lending to consumers and businesses shrank in December for the first time since 1992, according to new Reserve Bank of Australia figures.

 

The data shows the credit provided by financial companies fell 0.3% in December from November. The majority of the decline was in the business sector, where lending fell 1.1%.

The figures add to the speculation the Reserve Bank will make another cut to the official interest rate when it meets on Tuesday.

Thee Australian sharemarket has opened lower today after a poor night on Wall Street.

 

The benchmark S&P/ASX200 index has fallen 39.7 points or 1.1% to 3,486.5 at 12.00 AEDT.

 

BHP Billiton shares have lost 2.1% to $30.02, while Commonwealth Bank shares have also dropped 2.1% to $26.33. NAB lost 1.7% to $18.37, while Woolworths gained 0.3% to $27.28.

 

Gaming giant Tabcorp shares dropped 7.21% to $6.30 today after it announced the company raised $300 million in an institutional share placement.

 

“The proceeds will further strengthen the company’s balance sheet and position it strongly relative to its domestic and international peers,” Tabcorp chairman John Story said.

 

Harvey Norman has posted a 1.4% rise in sales for the first of half of the 2008-09 financial year. The group says sales totaled $3.15 billion, 1.4% higher than the same period in 2007-08 and up 3.5% from the previous half.

 

The Aussie dollar has also lost ground, moving back to US64 cents.

 

Overseas, Wall Street struggled after new data confirmed a bleak outlook for employment. The Dow Jones Industrial Average dropped 226.44 points or 2.7% to 8,149.01. Oil also fell 1.7% to $US41 a barrel.

 

The number of people claiming jobless benefits has jumped 159,000 to a record 4.776 million in January. It is the highest reading since 1967, according to the Labor Department.

 

Meanwhile, sales of newly built homes have dropped to their lowest levels since 1963.

 

Also in the US, troubled automaker Ford has posted a $5.9 billion fourth quarter loss, but says it has enough cash to fund its turnaround without government money.

 

The company says it will use its $US10.1 billion of available credit and cut 1,300 corporate jobs as part of its restructuring plan.

 

In Japan, electronics manufacturer Sony has recorded a 95% drop in third-quarter profits, as increased competition and the economic downturn eats into sales.

 

Profits for the quarter, which finished on 31 December, dropped from $US2.2 billion in 2007 to just $US110 million in 2008. Sony warns it will finish the financial year on 31 March with a loss of $US2.9 billion – the first in 14 years.

 

Back in Australia, the bad news continues for the media sector. Free-to-air television advertising dropped 5.3% in the six months to 31 December 2008. Data from Free TV Australia reveals advertising revenue for metropolitan regions fell 5.3% from the same period last year to just $1.5 billion

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments