ASX200 rallies on China data & Greece unwind
The local share market has sharply outperformed its regional peers today, firming over 1% to close at 5636.
There were various factors at play:
The enduring calamity in Greece appears to be finally fizzing out, as Tsipras returned home with the unenviable task of selling the agreed terms to his parliament, thereby sealing the deal. Whether or not there is a final twist in this saga remains to be seen. However, the relative calm in markets suggests it may be curtains, and this is luring buyers back to the fold.
There’s also the China factor. Today’s data releases, quarterly GDP and yearly Industrial Production, bettered expectations and in turn eased concerns over a softening outlook. While it might be premature to definitively call a bottom, the figures were encouraging and added to the prevailing positive sentiment of the session.
Perhaps surprisingly, the China figures did little to inspire the materials sector, which is was slowed by BHP. The world’s biggest miner is one of the few stocks in red today, after announcing write downs of its US shale assets. FMG was also weaker, while RIO was flat.
Elsewhere, gains were widespread. The Energy sector was the standout, despite the impending Iran deal, and concerns of oil oversupply. Financials, Industrials and Consumer Staples all closed sharply higher.
The Aussie dollar rallied hard on the back of the China data beat, before paring gains to be trading around 0.7460 US cents.
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Frequently Asked Questions about this Article…
The ASX200 rallied today due to positive developments in Greece and encouraging economic data from China. The easing of concerns over Greece's financial situation and better-than-expected Chinese GDP and Industrial Production figures contributed to the positive market sentiment.
The situation in Greece affected the stock market by creating uncertainty. However, recent developments suggest a resolution is near, which has calmed markets and encouraged investors to return, contributing to the ASX200's rally.
China's economic data, including quarterly GDP and yearly Industrial Production, exceeded expectations, easing concerns about a potential economic slowdown. This positive data helped boost investor confidence and contributed to the ASX200's rally.
Despite China's positive economic data, the materials sector didn't benefit as expected because of specific issues with major companies like BHP, which announced write-downs of its US shale assets, affecting its stock performance.
The Energy sector was the standout performer, despite concerns over oil oversupply and the impending Iran deal. Additionally, Financials, Industrials, and Consumer Staples sectors all closed sharply higher, contributing to the overall market rally.
The Australian dollar rallied strongly on the back of the positive China data, initially gaining significantly before paring back to trade around 0.7460 US cents.
Major mining companies had mixed performances today. BHP was one of the few stocks in the red due to write-downs of its US shale assets, FMG was weaker, and RIO remained flat, despite the positive market sentiment.
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