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Aust stocks close 0.9% stronger

The Australian stock market has closed stronger after Chinese inflation rose slightly more than expected.
By · 14 Feb 2014
By ·
14 Feb 2014
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The Australian stock market has closed stronger after Chinese inflation rose slightly more than expected and company earnings produced mixed results.

At the 1615 AEDT official market close, the benchmark S&P/ASX200 index was 0.91 per cent higher at 5,356.3 points, while the broader All Ordinaries index added 0.91 per cent to 5,366.9 points.

Official data showed Chinese inflation was 2.5 per cent year-on-year in January, the same pace as in December, but above forecasts of a 2.4 per cent increase.

IG market strategist Stan Shamu said the Chinese data hit a sweet spot, to an extent.

"It shows price growth is tracking at a steady pace while at the same time subdued enough to leave the People's Bank of China capacity to act if needed," Mr Shamu said.

"China has been concerned about the pace of credit growth but at the same time the PBoC has pledged to use a variety of tools to manage liquidity.

"This gives them ample room to act if liquidity becomes a problem again.

"Today we saw a decent drop in China’s interbank rates and this is helping to support equities."

Investors are also waiting for next week's release of United States Federal Reserve meeting minutes, he said.

"Given the decision to taper was unanimous, perhaps the minutes will shed some light on the overwhelming vote."

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