Australian Stock Futures Plunge Most in 9 Months on Bank Fears
Shani Raja
The S&P/ASX 200 Index futures contract due December tumbled 5.7 percent to 4,422 at 6:59 a.m. in Sydney. The U.S. Standard & Poor's 500 Index dropped 5.7 percent to below 1,000 for the first time since 2003 on speculation banks and real-estate companies are running short of money.
The S&P/ASX 200 Index yesterday rose 78.30 points, or 1.7 percent, to 4,618.70 after Australia's central bank cut its benchmark interest rate by one percentage point, the most since a recession in 1992.
Macquarie Group Ltd., Australia's biggest investment bank, gained 80 cents, or 2.3 percent, to A$35.80, while Commonwealth Bank of Australia advanced A$1.15, or 2.6 percent, to A$45.15.
Australia's biggest banks, led by Commonwealth and Westpac Banking Corp., cut their standard variable home loan rates by 80 basis points after the Reserve Bank of Australia's decision.
That will reduce the monthly repayments on an average A$250,000 ($178,000) mortgage by almost A$140. About 90 percent of Australian home buyers have variable interest-rate loans that traditionally move with the central bank's benchmark.
The following is a list of companies whose shares may rise or fall in Australia. This preview includes news announced after markets closed yesterday. Prices are from yesterday's close unless otherwise stated.
Mining shares: Gold futures rose 1.8 percent to $882 an ounce in New York, extending a 4 percent gain the previous day, on speculation central banks will cut borrowing costs to ease a credit crunch, boosting demand for the metal as an alternative asset. Newcrest Mining Ltd. (NCM AU), Australia's largest gold producer, slumped A$2.19, or 8.3 percent, to A$24.25.
American depositary receipts of BHP Billiton Ltd. (BHP AU), the world's largest mining company, fell 3.2 percent to the equivalent of A$29.29 a share in New York, A$2.41 lower than the A$31.70 close in Sydney.
Rio Tinto Group (RIO AU) rose A$3.29, or 3.9 percent, to A$87.77.
Oil companies: Crude oil rose 2.8 percent in New York, halting a 13 percent decline in the past four days, amid speculation OPEC will curb output because of falling prices.
Woodside Petroleum Ltd. (WPL AU), operator of Australia's A$25 billion ($20 billion) North West Shelf liquefied natural gas venture, declined A$1.95, or 4 percent, to A$47.05.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Last Updated: October 7, 2008 18:08 EDT