Home loans fall 2% in July, Oil price jumps: Economy Roundup

Home loan commitments fell 2% in July, indicating a slight cooling of conditions in Australia’s property sector.

Data from the Australian Bureau of Statistics shows the number of owner/occupier loans fell 2% to 63,259, while loans for the construction of dwelling and loans for the purchase of new dwellings dropped 0.7% and 0.5% respectively.

The value of total housing loans commitment during the month fell 2.9% to $22.5 billion on a seasonally adjusted basis.

Shares flat

The Australian sharemarket open flat today despite a positive night on Wall Street. The benchmark ASX-S&P 200 index rose nine points or 0.2% to 4532.8 points at 12:15.

The Australian dollar smashed through the US86c barrier at the open and could be pushed even higher by today’s big jump in consumer sentiment.

Shares in the four major banks were flat with the exception of NAB, which rose 1.2%. Telstra and Wesfarmers also moved higher.

Overseas, the Dow Jones industrial average closed 0.59%, the Standard & Poor’s 500 Index rose 0.88% while the technology focused Nasdaq Composite Index gained 0.94%.

The big corporate news of the morning came from uranium miner Palandin, which announced its plan to raise up to 15% of the company’s issued capital to fund explorations and mergers and acquisitions.

Oil price jumps

The price of oil has crashed through the $US70-a-barrel mark for the first time since July, ahead of a meeting of the OPEC group of major oil producing nations.

Fears of inflation and predictions that OPEC could cut production are believed to behind a 4.5% surge in the price of oil to $US71 a barrel.

British economy hangs on to AAA rating

Good news for Britain overnight, with major rating agency Moody’s preserving the country’s AAA rating, despite fears that its recession ravaged economy and big stimulus measures could force a downgrade.

However, signs that political parties are willing to cut public spending helped Britain hang on to its rating.