Late recovery helps market record a rise
The market took a hit in early afternoon trade after HSBC's purchasing managers index showed industrial activity in the world's second-biggest economy falling to an 11-month low in July.
But the market turned around and at the close the S&P/ASX 200 Index was up 18 points (0.36 per cent) at 5035.1. The broader All Ordinaries rose 17.2 points (0.34 per cent) to 5021.8.
"It certainly was the most surprising thing - we did see an impact, in both the currency and the market - but fortunately we have managed to recover in the late afternoon trade," CommSec analyst Juliette Saly said.
She said resource stocks benefited as gold prices held above $US1330 an ounce.
"We are seeing commodity prices back in favour and that's been helping the mining sector."
Iron ore miner Fortescue outperformed the market, reversing Tuesday's losses to close 4.1 per cent higher at $3.77.
Atlas Iron added 9 per cent to 91¢ after reporting a 16 per cent increase in shipping volumes during the June quarter, with expectations to lift production further.
BHP Billiton also did well, adding 23¢ to $34.73 and Rio Tinto was up 92¢ to $57.68. Among other market heavyweights, Telstra added 5¢ to $5.01.
The market appeared to overlook local data showing headline inflation rising by 0.4 per cent in the June quarter, for an annual increase of 2.4 per cent, with both levels marginally below economists' median forecasts.
Financials performed well, with ANZ up 6¢ to $28.98, Commonwealth Bank 51¢ to $72.90, Westpac 26¢ to $29.75 and NAB 18¢ to $30.67.
Bucking the positive trend, property group Australand lost 5¢ to finish at $3.45 after revealing its net profit fell 1.4 per cent to $88.4 million in the six months to June 30, compared with the same period in 2012. Its shares have fallen since Monday, when its major shareholder, CapitaLand, a Singapore-based real estate group, opted to retain its Australand stake, after a six-month review.
The dollar hit a one-month high, but fell on the release of weak Chinese manufacturing figures. Late on Wednesday it was trading at US92.57¢, down from US92.59¢ on Tuesday.
Frequently Asked Questions about this Article…
The market recovered in late trade after an early hit from HSBC’s purchasing managers index showing Chinese industrial activity fell to an 11‑month low in July. Resource stocks and financials helped the turnaround — the S&P/ASX 200 closed up 18 points (0.36%) at 5035.1 and the All Ordinaries rose 17.2 points (0.34%) to 5021.8. Local headline inflation rose 0.4% in the June quarter (2.4% annually), but the market largely overlooked it as commodity strength supported miners and banks.
The HSBC PMI reading that showed a slowdown in Chinese manufacturing pushed the market lower in early afternoon trade and weighed on the currency. The Australian dollar hit a one‑month high earlier but fell on the weak Chinese figures; late Wednesday it traded at US92.57¢, slightly down from US92.59¢ the day before. Investors saw an initial negative reaction to the PMI before a late recovery.
Gold holding above US$1,330 an ounce supported resource stocks, and commodity prices generally moved back into favour. That helped the mining sector outperform and contributed to the late‑afternoon market recovery described by CommSec analyst Juliette Saly.
Fortescue reversed prior losses and closed 4.1% higher at $3.77, reflecting strength in the iron ore sector. Atlas Iron jumped 9% to 91¢ after reporting a 16% increase in shipping volumes in the June quarter and saying it expects to lift production further.
BHP Billiton added 23¢ to close at $34.73, while Rio Tinto rose 92¢ to finish at $57.68 — both contributing to the resource‑led market upswing.
Telstra added 5¢ to close at $5.01. Major banks also performed well: ANZ was up 6¢ to $28.98, Commonwealth Bank rose 51¢ to $72.90, Westpac added 26¢ to $29.75, and NAB gained 18¢ to $30.67.
Australand’s net profit fell 1.4% to $88.4 million for the six months to June 30 compared with the same period in 2012, and its shares lost 5¢ to finish at $3.45. Its stock had fallen since CapitaLand — the major shareholder — chose to retain its Australand stake after a six‑month review. Everyday investors in property stocks should note that profit downgrades and major‑holder actions can put pressure on share prices.
The S&P/ASX 200 and All Ordinaries gains show that resource and financial stocks can offset negative macro headlines (like weak Chinese PMI or modest inflation prints). For everyday investors, the session highlights the market’s sensitivity to commodity prices, currency moves and global manufacturing data — factors to watch when assessing portfolio exposure to miners, banks and the Australian dollar.
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