China data, positive leads add impetus
THE sharemarket benchmark jumped back above the 4100-point level yesterday on news late last week that China's economy grew in the June quarter at the rate economists expected.
THE sharemarket benchmark jumped back above the 4100-point level yesterday on news late last week that China's economy grew in the June quarter at the rate economists expected.Positive leads from the US (up 1.6 per cent) and London (up 1 per cent), where investors also welcomed the news, sent the market sharply higher at the start of the session.At one stage the key index was up 44 points. However, by the close that gain was almost exactly halved after China's Premier Wen Jiabao warned that economic recovery for his country was not a fait accompli.The response from shareholders to his comments added weight to analysts' arguments that the global sharemarket rally sparked by China's economic growth slowing by "only" half a percentage point was built on relief more than anything.Overall, the S&P/ASX 200 Index rose 22.9 points, or 0.56 per cent, to 4105.1.The gains were broad-based, with energy shares leading the market higher, adding 1.2 per cent. Materials put on 1 per cent and financials rose 0.4 per cent.Only the telcos sector closed lower, off 0.3 per cent.Analysts said the rally was welcomed but lacked a little legitimacy. Trading was still extremely light just $2.8 billion worth of shares changed hands with 12 of the top 200 stocks "unchanged"."Given the market's advance from midday Friday was predicated on 'less-bad news', as opposed to 'legitimate good news', it certainly feels like there are still plenty of would-be sellers out there," said IG Markets analyst Cameron Peacock.The stand-out performer was Whitehaven Coal, whose shares surged nearly 18 per cent, climbing to $4.07, up from $3.45 on Friday. The surge was large enough to make it a bigger contributor to the overall market's advance than Rio Tinto.Commonwealth Bank hit its highest intraday price in 17 months, touching $54.29, before easing to end the day higher at $54.06.Westpac gained 11?, at $22.16, after it said it would raise $500 million through the issue of subordinated notes.Seven West Media was placed in a trading halt, at $1.62 a share, after the company looked to shareholders to raise $440 million to help reduce its debt.