3:00AM New York, 7:30 PM Sydney – Australian stocks fall on mounting worres of global economic slowdown.

Stocks in Australia plummeted from a two-day rally led by commodity stocks on mounting concern that the country’s 17-year economic expansion will slow in the next three to nine months.

A recent research compiled by Westpac Banking Corp. and the Melbourne University’s Institute of Applied Economic Research and Social Research point to the weakest economic growth since the third quarter of 2002.

South Korean steel giant Posco reported a 40% profit increase in the three months ended September and offered a cautious outlook for the current quarter.

The outlook for the world economy was made gloomier after prominent university of New York University professor Nouriel Roubini on Bloomberg Television interview said the U.S. economy will slip into the worst economic recession in 40 years that will force unemployment to rise to 9% and house prices to fall another 15%. Bill Gates, the founder of Microsoft also commented that unemployment may rise above 9%.

Market Sentiment

In Sydney trading ASX 200 fell 0.81% or 35.2 to 4,300.00.

Of the ASX 200 index stocks 90 increased, 93 fell, and 17 were unchanged. Roc Oil Co. led advancers in the index shares with a rise of 15.08%.

Australia’s Leading Index Falls 0.1% in August

A research compiled by Westpac Banking Corp. and the Melbourne University Institute of Applied Economics and Social Research indicates that leading index of economic activities which measures economic growth in the coming three to nine months, dropped by 0.1% to 259.2 points in August.

The key measure rose by an annualized 2.5% in August, falling from 3.3% a month earlier.

A coincident index- a gauge of current economic activity- increased 0.4% in August from a month earlier.

Chief economist of Westpac Bill Evans said though the economy will slow in the coming three to nine months the decline is not likely to exceed the weakness in the years 2000 and 2001.

Australia Considers Additional Stimulus Package

Australia’s deputy Prime Minister Julia Gillard said today the government might add to the A$10.4 billion stimulus package unveiled yesterday to stimulate consumer spending in the pre-Christmas period.

From the first week in December the government will make A$4.8 billion one-time payment to pensioners and A$3.9 billion and A$1.5 billion payments will be made to families and homebuyers respectively.

Single pensioners will receive A$1,400 and pensioners will receive A$2,100 and low income and middle income families will be granted A$1,000 for each child under their care.

First time homebuyers will be entitled to A$14,000 and first time homebuyers who purchase a newly constructed house will get A$21,000 in tax incentives.

Gainers & Losers