Iron ore miners lead way as market defies weak growth data
The sharemarket rose despite gross domestic product data showing economic growth fell short of modest expectations.
On Wednesday, the benchmark S&P/ASX 200 Index gained 17.7 points, or 0.3 per cent, to 5273.8.
Iron ore miners led gains as the commodity's price continued to defy predictions for a correction this quarter, climbing above $US138 a tonne for the first time in three months.
Bureau of Statistics data showed that during the September quarter GDP grew at just 0.6 per cent, below consensus expectations for a 0.7 per cent rise. Annual GDP growth is tracking at 2.3 per cent, below Treasury's forecast for 2.5 per cent. While a continued slowdown in the mining sector was behind the slowing GDP growth, the figures showed continued recovery in housing and other non-mining investment.
"Slightly weaker than expected GDP numbers are consistent with comments from companies during the recent AGM season," Colonial First State Global Asset Management's Matthew Reynolds said.
But Citi economist Joshua Williamson said there were signs GDP had begun to accelerate in the December quarter.
"The economic outlooks for the US and China have improved, while domestically we've seen the effects of the last interest rate cute in August start to flow through in higher property prices, rising equities, better consumer and business confidence readings, as well as a falling exchange rate that will also help a rebalancing economy," he said.
The GDP figures prompted a fall in the dollar, which had risen to US91.45¢ overnight. At the local close, the dollar was buying US90.67¢, the same as at the previous close.
Shopping centre operator Westfield climbed 4.1 per cent to $10.78 on the announcement it will split its operations, separating the Australia and New Zealand business and the international business, which has assets in the US and Britain.
BHP Billiton rose 1 per cent to $36.80. Rio Tinto added 1.2 per cent to $66.29 as analysts endorsed the strategy presented at the miner's investor day. Fortescue Metals added 2.9 per cent to $5.63, while Atlas Iron jumped 7.7 per cent to $1.19.
Junior goldminer Perseus Mining was the worst-performing stock, dumping 9.4 per cent to 24¢ as the spot price of gold fell to $US1221.16 an ounce.