Housing finance drops to lowest point in 10 years: Midday Roundup

Data released this morning by the Australian Bureau of Statistics shows housing finance levels dropped 5.6% in February, a decade low for the number of loans approved in a month.

Home loans approvals were a seasonally adjusted 45,393. The 5.6% decrease was well below expectations of a 1.5% fall.

“There were expectations that it would fall on the back of the Queensland floods but if you look at the data a little bit more closely housing finance commitments fell pretty much across the board,” Macquarie Group associate economist Ben Dinte told AAP.

Australian market weaker at midday as housing figures disappoint

The Australian sharemarket was weaker at midday, after a flat night on Wall Street.

The market was also disappointed by housing finance figures for February, which was lower than expected in February.

Just after midday, the benchmark S&P/ASX 200 index was down 0.16% to 4892.2, while the All Ordinaries index had slipped 0.11% to 4993.2.

The local dollar was stronger against a host of currencies, and was trading at 1.0396 US cents after midday, higher than morning figures of US 103.3.

Gold, silver jumps to record, Brent crude soars

Gold reached an all-time high last night of $US1,450 an ounce, as investors sought protection from inflation fears and debt problems in the euro zone, and bet the US would continue with its quantitative easing program.

Silver also soared to a 31-year high, following an impressive 22% rise in the quarter, versus a 0.7% lift by gold.

“Bernanke’s comment makes inflation a more real event in the United States. He at least acknowledged the fact that the Fed needs to monitor inflation very closely, and that spooked investors into gold,” said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott, told Reuters.

Rising commodity prices also played a part, with Brent crude lifting to a two and a half year high as geopolitical troubles continued to worry the market.

Brent has surpassed $US122 a barrel, shrugging off an interest rate rise by China, which had some influence on Wall Street trade.

Wall Street shares flat

Wall Street was flat in quiet trade overnight. The Dow Jones industrial average edged down 0.05% to close at 12,393.90, while the Standard & Poor’s 500 Index lost 0.02% to 1,332.63, and the Nasdaq Composite Index edged up 0.07% to 2,791.19.

Across to Europe, the FTSEurofirst 300 index of top European shares rose 0.2% overnight to 1,143.94 points, supported by energy firms which gained on political unrest in the Middle East. It was the highest close since March 9.

The European Central Bank is expected to lift rates this week, despite concerns over European debt.

NBN construction chief resigns

The rush of bad news for the NBN Co. has continued, with construction chief Patrick Flannigan resigning just days after the company aborted its construction tender process, claiming all tenders were too expensive.

The suspension of the tender process for the $10-14 billion contract has caused controversy in the construction sector, with anonymous sources accusing the firms involved of price gouging. However, the construction sector has reacted angrily to the claims.

The exact reasons for Flannigan’s departure are unknown, although it is believed he was not responsible for suspending the tender.