Trade Surplus Expectation Miss Sinks the Australian Stock Market
The Australian stock market had expected a surplus in the country’s trade balance in the latest report. However, a drop in the rate of surplus growth has resulted in a significant nosedive in the country’s stock markets. According to data revealed for the month of August, the excess on the balance on goods and services stood at $6.9 billion. The surplus actually rose by as much as $73 million from the month of July, however, in seasonally adjusted terms it declined. After adjustments, the surplus stood at $5.9 billion and reflected an actual decline of $1.3 billion in the surplus from July.
The market, on the other hand, had expected a surplus, as mentioned earlier and this reversal resulted in major declines. The Australian share market index dropped by as much as 2.1% today by noon and it remains to be seen how long it takes to recover. The decline has hit the main Australian banks the hardest and the shares of all the four main banks declined significantly. On the other hand, Mayne Pharma gave some of the gains it made yesterday. The pharma company had agreed to a deal to sell its contraceptive drug in the United States and that had resulted in a significant uptick in the stock.
Among the gainers in the market today, the utility sector has been the leader of the back but on the other hand, the energy space has performed pretty poorly. As of noon today, the ASX 200 index has nosedived by as much as 140 points and has hit 6500. On the other hand, the SPI, which tracks the futures space, has slid by as much as 139 points. That being said, it remains to be seen whether the market can regain some of the momenta before the end of the week.