After a weak start today markets should respond strongly with the latest GDP figures coming in well ahead of expectations. Gross Domestic Product for the quarter grew 1.1 per cent.
Forecasts were in the range of 0.8 and 1 per cent and so a figure above 1 per cent will increase the likelihood of a rates rise. The Australian dollar has already responded, up to $0.9284.
Solid export volumes for the March quarter impacted the strong result with the current account deficit narrowing in the period.
The Australian share market opened lower, earlier this morning, in response to a pullback in US markets that came off fresh highs.
The S&P/ASX 200 index is 21 points down at 5,459. On the futures market the SPI is 22 points lower.
Economic news
The Australian Bureau of Statistics released National Accounts data today showing strong growth in the country’s GDP which is up 1.1 per cent for the March quarter and 3.5 per cent year on year, seasonally adjusted. Mining is said to have contributed 0.9 percentage points to the increase in GDP while financial and insurance services, and Construction each contributed 0.2 percentage points.
The Australian Industry Group’s Performance of Services Index was also released today, it rose 1.3 points to 49.9 points which is a touch below the 50 point threshold that represents expansion.
Company news
Construction company Watpac Limited
(ASX:WTP) has inked a $34 million contract to build the first stage of Charles Sturt University’s permanent campus at Port Macquarie.
The initial stage will involve the construction of teaching areas, staff offices and car parking. CEO Martin Monro says construction will begin immediately. The project adds to a total of almost $900 million worth of education related works by the company, along the East coast. Shares in Watpac are trading up 0.59 per cent at $0.85.
Worleyparsons Limited
(ASX:WOR) has won a contract with QGC to provide engineering and project services for the company’s QCLNG development and coal seam gas facilities in Queensland.
The scope of services will include gas well heads, pipelines, compression facilities and tanker loading facilities. Shares in Worleyparsons are trading down 0.25 per cent at $15.83.
Best and worst performers The best performing sector is real estate investment trusts gaining 13 points to 1,080. Shares in Australand Property Group
(ASX:ALZ) have risen 5.92 per cent and trading at $4.57. Shares in Stockland Corporation Limited
(ASX:SGP) and Goodman Group
(ASX:GMG) are also stronger.
The worst performing sector is consumer discretionary, falling 14 points to 1,776. Shares in Fairfax Media Limited
(ASX:FXJ) have fallen 3.17 per cent, trading at $0.99. Shares in Navitas Limited
(ASX:NVT) and Reject Shop Limited
(ASX:TRS) are also lower.
Gold and the dollar
Gold is trading at $US1,246 an ounce.
The Australian dollar is buying $US0.9284.
