Late recovery keeps market in the black
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.
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Although HSBC's PMI showed Chinese manufacturing fell to an 11‑month low in July and knocked markets early in the afternoon, the Australian sharemarket staged a late recovery. 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, helped by strength in resource stocks and commodity prices.
Resource companies led the recovery as commodity prices improved and gold held above US$1,330 an ounce, supporting mining sector sentiment. Iron ore miners and other commodity names outperformed, which helped offset the earlier weakness from the Chinese PMI release.
Atlas Iron jumped 9% to 91¢ after reporting a 16% increase in shipping volumes in the June quarter. Higher shipping volumes point to stronger sales and production momentum, which can boost revenue and investor confidence for iron ore producers.
Iron ore miner Fortescue reversed previous losses to close 4.1% higher at $3.77. BHP Billiton added 23¢ to $34.73 and Rio Tinto rose 92¢ to $57.68, reflecting broad strength across big miners during the session.
Financial stocks performed well: ANZ rose 6¢ to $28.98, Commonwealth Bank added 51¢ to $72.90, Westpac gained 26¢ to $29.75 and NAB increased 18¢ to $30.67. For everyday investors, stronger bank share moves can signal confidence in the financial sector and help support broader market gains.
Local data showed headline inflation rose 0.4% in the June quarter for an annual increase of 2.4%, both slightly below economists' median forecasts. The market largely appeared to overlook this print as commodity and resource strength drove the session.
Australand fell 5¢ to $3.45 after reporting net profit down 1.4% to $88.4 million for the six months to June 30. Its shares had also been under pressure since CapitaLand, the Singapore-based major shareholder, opted to retain its Australand stake following a six‑month review.
The Aussie dollar hit a one‑month high but then weakened after the release of weak Chinese manufacturing figures; it was trading at US92.57¢ (down slightly from US92.59¢). Gold remained above US$1,330 an ounce, which helped support resource stocks during the rally.
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