Boost from Beijing as shares defy headwinds

China's rapid economic growth slowed in the June quarter to a still robust 9.5 per cent.

By InvestSMART · 14 Jul 2011

By InvestSMART ·
14 Jul 2011

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AUSTRALIAN shares closed higher after defying weak offshore leads and receiving a boost from better than expected Chinese economic growth data.

The benchmark S&P/ASX200 index rose 19.6 points, or 0.43 per cent, at 4514.8, while the broader All Ordinaries index was up 19.7 points, or 0.43 per cent, at 4583.2.

Austock securities strategist Michael Heffernan said the bourse made solid gains. "It was a resolute performance right from the jump-off," Mr Heffernan said.

"Then we listed a bit and then when the Chinese data came out, that gave us a bit of a fuel injection for the afternoon."

China's rapid economic growth slowed in the June quarter to a still robust 9.5 per cent, easing fears of an abrupt slowdown and allowing the government room to clamp down on inflation.

Overseas leads were negative as a credit rating downgrade for Ireland's sovereign debt to junk bond status led to losses on Wall Street.

Locally, gold stocks performed strongly as investors moved into safe-haven assets and defied negative leads from Europe and the US. Gold rose to within sight of its record overnight price, and closed in Sydney at $US1569.04 ($1470.37) per fine ounce, up $US18.61 from $US1550.43 on Tuesday. Gold miner Newcrest was up 25? at $38.96.

Rupert Murdoch's News Corp continued its slide as a group of US investors amended their lawsuit against the media company to include Britain's phone-hacking scandal as evidence of a nepotistic corporate culture "run amok".

News Corp was down 45?, or 2.96 per cent, at $14.74 and its non-voting stock was down 28?, or 1.93 per cent, at $14.26.

Among the major banks, National Australia Bank fell 12? to $23.76, ANZ added 8? to $21.16, Commonwealth Bank fell 4? to $49.60 and Westpac steady at $21.14.

Resource major BHP Billiton added 17? to $43.63 and Rio Tinto was down 48? at $80.95.

Rio Tinto-majority owned coal miner Coal & Allied Industries was down 29? at $102.80 after reporting a rise in first half production.

Agricultural chemicals supplier Nufarm was up 8? at $4.56.

National turnover reached 2.07 billion shares, worth $5.36 billion.

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Frequently Asked Questions about this Article…

How did the ASX200 and All Ordinaries perform today and what drove the gains?

Australian shares closed higher: the S&P/ASX200 rose 19.6 points (0.43%) to 4,514.8 and the All Ordinaries gained 19.7 points (0.43%) to 4,583.2. Markets got a boost after better-than-expected Chinese economic growth data, which helped offset weaker overseas leads.

What Chinese economic data influenced Australian markets and why does it matter to investors?

China’s GDP growth slowed in the June quarter to a still-robust 9.5% — easing fears of an abrupt slowdown. For everyday investors, stronger-than-expected Chinese growth can support demand for commodities and lift sentiment in Australian shares.

Why did gold and gold stocks outperform, and what were the latest gold prices?

Investors moved into safe-haven assets while overseas markets were weak, lifting gold and gold miners. Gold closed in Sydney at US$1,569.04 (A$1,470.37) per fine ounce, up US$18.61 from the prior session, and gold miner Newcrest closed at $38.96.

What happened with News Corp shares and what news affected them?

News Corp shares fell after a group of US investors amended their lawsuit to include Britain’s phone-hacking scandal as evidence of corporate culture concerns. Ordinary News Corp stock closed at $14.74 (down 2.96%) and its non-voting stock at $14.26 (down 1.93%).

How did the major Australian banks trade today (NAB, ANZ, CBA, Westpac)?

Bank share movements were mixed: National Australia Bank closed at $23.76, ANZ at $21.16, Commonwealth Bank at $49.60, and Westpac was steady at $21.14. The session showed differing performance across the big four rather than a uniform trend.

What moves did big resource names like BHP Billiton and Rio Tinto make?

Resource stocks were mixed: BHP Billiton closed at $43.63 (added during the session) while Rio Tinto ended lower at $80.95.

Why did Coal & Allied Industries shares fall despite higher production?

Coal & Allied Industries fell to $102.80 after reporting a rise in first-half production. The share move shows that production increases don’t always translate to immediate share-price gains — the market factors in many variables.

What was the overall market turnover and what does that mean for investors watching the ASX?

Total turnover reached 2.07 billion shares worth $5.36 billion. Higher turnover generally means more active trading and liquidity, which can make it easier to buy or sell shares without large price gaps — something everyday investors may appreciate when timing trades.