G20 meeting lists global sharemarkets, services sector still shrinking, NAB cuts jobs: Economy roundup

The announcement of $1.1 trillion of new money from G20 leaders has pushed sharemarkets higher around the world, with Australia’s market extending recent gains.

Wall Street enjoyed a third consecutive day of rises after the announcement was made, while technology and energy stocks enjoyed impressive gains. The Dow Jones Industrial Average closed up 216.48 points or 2.79% to 7978.08.

BlackBerry maker Research In Motion rose 22% to $US59.75, most likely due to the news its application store is ready for launch.

In Europe, the FTSEurofirst closed up 169.36 points or 4.3% to 4124.97.

Back home, the Australian sharemarket has opened 1.6% higher after the G20 announcement and help from Wall Street. The benchmark S&P/ASX200 index was up 43.5 points or 1.18% to 3723.7 at 12.10 AESDT.

The dollar also enjoyed strong gains, moving past US72 cents to a three-month high.

AMP jumped 4.4% to $5, while ANZ followed closely behind rising 3.9% to $16.98. NAB shares gained 3.7% to $22.30, while Woolworths shares dropped 0.6% to $24.86.

But the good news hasn’t continued everywhere. Activity in the services sector has remained weak in March, according to the Australian Industry Group’s Performance of Services Index.

The seasonally adjusted index rose by 3.4 points to 35.6 in March, but still remains below the 50-point level separating expansion from contraction.

AIG chief executive Heather Ridout has said that all sectors of the industry in all states are experiencing deteriorating conditions.

“The Australian PSI for March shows that confidence remains under siege from rising unemployment and an uncertain outlook for the domestic and world economy.

“The RBA and the OECD have confirmed that conditions will get tougher in Australia in the months ahead, and this makes a strong case for a further reduction in interest rates,” Ridout said. 

Automaker Holden is changing its operations into a single shift, two-crew structure in a response to falling car sales, but says it will emerge from the downturn.

While no retrenchments will be made, the company says two crews will not work on alternate days. “It’s a step we must take to align production with current forecast demand in both domestic and hard-hit export markets,” Holden said.

“We’re confident that we’ll get through these tough times and emerge as a stronger organisation.”

But NAB workers haven’t been so lucky, as the bank prepares to slash 50 personal banking jobs from branches nationwide.

“These changes are about increasing our focus on front-line relationship banking,” a spokesperson for NAB Business Banking told Business Spectator.

“They reflect our commitment to efficiently grow our business by increasing the level of customer-facing employees and attracting new customers, particularly in the small and medium enterprise business segment.”