Election result, China push shares to a high

Australian shares are close to their highest point for the year as investor confidence is boosted by a decisive federal election result and encouraging Chinese economic data.

Australian shares are close to their highest point for the year as investor confidence is boosted by a decisive federal election result and encouraging Chinese economic

data.

Stocks are also being boosted by the need for major construction projects in Japan – Australia’s second-largest trading partner – ahead of the 2020 Olympics.

Easing anxiety over Syria after Russia suggested that Syria place its chemical weapons under international control has also influenced trade.

The latest gains came as the Australian dollar has hit a six-week high as investors get increasingly optimistic about the global economy.

Major resources companies, the big banks and other blue-chip stocks had led the Australian market higher, Lonsec senior client adviser Michael Heffernan said.

‘‘The result of the election has injected a bit of confidence and positive sentiment. That’s flowed over yesterday and today,’’ he said.

Economic data from China indicated the Chinese economy was performing quite well, boosting Australian resources stocks.

BHP Billiton rose 26¢ to $35.90, Rio Tinto added 93¢ to $62.88 and Fortescue Metals was 6¢ higher at $4.51.

Of the banks, Westpac was up 48¢ at $32.41, National Australia Bank gained 26¢ to $33.44, ANZ firmed 23¢ to $30.17 and Commonwealth Bank jumped 27¢ to $73.90.

Elders rose 1¢ to 10.5¢ after the rural services provider announced that it had nearly completed refinancing the group and would slash about 10 per cent of its staff.

Drillsearch shares were 1¢ lower at $1.37 even as it signed a $120 million joint venture deal giving Santos a 60 per cent stake in the Western Cooper Wet Gas project.

Tokyo stocks rose 1.54 per cent, extending the previous day’s rally on positive growth data and the success of Japan’s bid to host the 2020 Olympics.

Late on Tuesday, the Australian dollar was trading at US92.50¢, up from 91.98¢ on Monday. It peaked at US92.90¢, its highest level since July 26.

Official data released on Tuesday showed that China’s industrial production rose 10.4 per cent in the 12 months to August, the fastest increase since March 2012.

The spot price of gold in Sydney finished at $US1378.48, down $US8.42 on Monday.

National turnoverwas 1.65 billion securities worth $4.16 billion.

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