Financials lead market higher on housing data
The release of China's latest economic growth figure of 7.5 per cent - in line with expectations - also helped the major resources stocks improve from early lows.
"The financial space saw good buying, probably helped by another solid auction clearance rate in Sydney over the weekend," IG chief market strategist Chris Weston said. "Housing seems in a good space right now, especially after May home loan values have hit their highest level since 2009."
Markets are also tipping a rate cut by the Reserve Bank in August, which would further boost the housing market, and China's economic data - down from 7.7 per cent previously - did nothing to change that view, Mr Weston said.
Westpac was the best-performing bank, up 25¢ to $29.36, while ANZ gained 23¢ to $28.95, Commonwealth Bank added 28¢ to $71.25 and NAB was 9¢ higher at $30.03. Among other financial companies, Macquarie Group gained 42¢ to $45.16 and property owner Goodman Group added 8¢ to $4.80.
In resources, BHP Billiton lost 6¢ to $33.25, up from its earlier low of $32.87, and Rio Tinto added 3¢ to $54.77, up from an earlier low of $54.22.
Smaller miners fared worse, with Fortescue Metals down 4¢ at $3.50, and gold miner Newcrest shed 46¢ to $11.63.
One of the worst performers was Treasury Wine Estates, after it said it would take a $160 million hit from measures it is taking to overcome a glut of stock in the US. Its shares lost 71¢, or 12.2 per cent, to $5.11.
The benchmark S&P/ASX 200 Index gained 7.2 points, or 0.14 per cent, at 4981.1. The broader All Ordinaries Index added 8.1 points, or 0.16 per cent, at 4965.6.
On the ASX 24, the September share price index futures contract was four points higher at 4940, with 19,665 contracts traded.
The Sydney gold price was $US1286.07, up $US8.32 from $US1277.75 on Friday.
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Bank shares rose after encouraging signs for the housing sector — including strong auction clearance rates in Sydney and May home loan values hitting their highest level since 2009 — which drove buying in the financial space. Markets are also pricing in a possible Reserve Bank rate cut in August, a move investors expect would further support the housing market and bank earnings.
Westpac led the banks, up 25¢ to $29.36, followed by ANZ (+23¢ to $28.95), Commonwealth Bank (+28¢ to $71.25) and NAB (+9¢ to $30.03). Other financial stocks that rose included Macquarie Group (+42¢ to $45.16) and property owner Goodman Group (+8¢ to $4.80).
China’s 7.5% growth — in line with expectations — helped major resources recover from early lows. For example, Rio Tinto added 3¢ to $54.77 (from an earlier low of $54.22) while BHP Billiton was down 6¢ at $33.25 but had recovered from an earlier low of $32.87. However, smaller miners saw weaker results.
Smaller miners underperformed: Fortescue Metals fell 4¢ to $3.50, and gold miner Newcrest dropped 46¢ to $11.63, according to the report.
Treasury Wine Estates plunged after announcing it would take a $160 million hit to address a glut of stock in the US. The shares lost 71¢, or 12.2%, falling to $5.11 on the news.
The S&P/ASX 200 Index gained 7.2 points (0.14%) to 4,981.1, while the All Ordinaries Index rose 8.1 points (0.16%) to 4,965.6. On the ASX 24, the September share price index futures contract was four points higher at 4,940, with 19,665 contracts traded.
Markets were tipping an August rate cut by the Reserve Bank, a view supported by strong housing indicators such as high auction clearance rates and rising home loan values. Investors expect a cut could further boost the housing market and, by extension, bank shares — although the article reports this as market sentiment rather than a certainty.
The Sydney gold price was reported at US$1,286.07, up US$8.32 from US$1,277.75 on Friday.
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