New car sales lift in March, but ABS downbeat on outlook: Midday Roundup

New motor sales lifted last month, and remain higher year-on-year, although the Australia Bureau of Statistics expects the summer’s natural disasters to cut into sales as damaged vehicles are repaired.

In March, 87,141 new cars were sold, up 3.4% from the previous month, and 1.9% for the year.

“The impact of recent flooding and cyclone events on new motor vehicles sales is beginning to show in trend estimates for Queensland,” the Australian Bureau of Statistics said.

“For both February and March 2011, Queensland recorded the largest increase in the trend estimate (1.0% and 1.1% respectively).”

“It is expected that the flooding events will continue to have an impact on sales in both Queensland and a number of other states over the next few months as damaged vehicles are replaced.”

Stevens on China, monetary policy

The market is also digesting comments from Reserve Bank of Government Glenn Stevens cautioning on loose monetary supply, and highlighting the rise of China as an economic giant.

While describing China’s emergence as a “huge economic event” Stevens also said the nation could not “expect to be immune from various other afflictions experienced by all countries that can occasionally impede economic growth.”

Stevens also told a New York audience that the RBA’s position has “tended to be that it’s a risky thing to keep the price of money really low.”

Rio downgraded, Bank of Queensland’s profit slumps

In company news, Rio Tinto shares are weaker today after its March quarter production numbers prompted some investment banks to downgrade their full-year profit forecasts for the mining giant.

Rio yesterday afternoon reported a 3% fall in quarterly iron ore production. It said Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather, but most were recovering and benefiting from continued strong prices.

Elsewhere, regional lender Bank of Queensland has reported a slump in first-half profit and the resignation of chief David Liddy.

It reported a normalised cash net profit after tax of $57.6 million, from $97.2 million in the previous corresponding period, hurt by a surge in underlying bad debts.

Negative start to the day for local stocks, Australian dollar

The Australian market started the day weaker after mixed leads and continued to trade lower around midday.

At 11.55 AEST, the benchmark S&P/ASX 200 was down 0.93% to 4865.3, while the broader All Ordinaries index was 0.92% weaker at 4953.8.

All the major banks and resource stocks, as well as Telstra, were lower.

At 12.15 AEST, the Australian dollar was trading 0.27% lower at $US1.0479.

Wall Street flat

Overnight, US retail sales disappointed with a 0.4% lift in March, while US business inventories rose by a lower-than-expected 0.5% in February. The Beige Book also said most districts had stated that gains were widespread across sectors.

Wall Street closed down, with financials and telcos weighing. The Dow Jones industrial average edged up 0.06% to 12,270.99, while the Standard & Poor’s 500 Index inched was flat at 1,314.41. The Nasdaq Composite Index outperformed, with a 0.61% jump to 2,761.52.

Investors seem to be looking ahead to the Federal Reserve’s policy meeting in two weeks, Bruce Bittles, chief investment strategist of Robert W. Baird & Co in Nashville, told Reuters.