Miners back in favour as investors warm to Chinese data
The benchmark S&P/ASX 200 Index rose 53.5 points, or 1.1 per cent, to 5108.7 as investor sentiment about our biggest trading partner, China, remained upbeat. The broader All Ordinaries rose 55.3 points to 5094.
Patersons Securities analyst Tony Farnham said strong Chinese factory data, released on Friday afternoon, sparked a rally in base metal prices, with the ASX reaping the rewards.
Copper rose 1.2 per cent, its highest in two months, while iron ore firmed 1.3 per cent to $US133.10 a tonne.
"We gave the major resource stocks a bit of a boost [last Friday], but then they got an extra kick again in European and US trading," Mr Farnham said. "You would attribute that to the Chinese numbers."
BHP Billiton shares rose 2.4 per cent to $36.81, while Rio Tinto gained 2.6 per cent to $61.83.
Gold was up for the fourth day in a row, rising 1.2 per cent to $US1330 an ounce.
Evolution led the pack among goldminers, jumping 19 per cent to 92¢, while OceanaGold firmed 7.1 per cent to $1.73. Newcrest gained 7.9 per cent to $12.39 after reporting an annual net loss of $5.78 billion for the year to June 30.
Investor sentiment was bolstered by some companies posting better than expected earnings as reporting season began in earnest.
Electronics and entertainment retailer JB Hi-Fi leapt 3.2 per cent to $19.12 after it announced an 11 per cent jump in full-year profit.
Mr Farnham said investors would be looking towards earnings guidance amid the barrage of financial reports that companies will release in coming weeks.
The dollar was buying US92¢ in late trade. Most analysts are tipping the currency to come under pressure in the months ahead despite a slight recovery in past days.
The big banks all finished in the black, gaining between 0.4 and 1.3 per cent. Telstra also was a strong finisher, advancing 0.6 per cent to $5.11.
Frequently Asked Questions about this Article…
Investors warmed to stronger-than-expected Chinese factory data, which boosted base metal prices and in turn lifted the materials sector. The S&P/ASX 200 rose 53.5 points (1.1%) to 5,108.7 and the All Ordinaries rose 55.3 points to 5,094 as big miners and resources stocks rallied.
Strong Chinese factory numbers sparked a rally in base metals: copper rose 1.2%, reaching its highest level in two months, and iron ore firmed 1.3% to US$133.10 a tonne. Gold was also higher, up 1.2% to US$1,330 an ounce.
BHP Billiton shares rose 2.4% to $36.81 and Rio Tinto gained 2.6% to $61.83, reflecting the broader lift in resource and base metal prices after the positive Chinese data.
Goldminers saw big moves: Evolution led the pack, jumping 19% to $0.92, OceanaGold firmed 7.1% to $1.73, and Newcrest rose 7.9% to $12.39 after reporting an annual net loss of US$5.78 billion for the year to June 30.
Investor sentiment was bolstered by some companies reporting better-than-expected earnings as reporting season began. Patersons analyst Tony Farnham noted investors would be watching upcoming earnings guidance amid the flood of financial reports in coming weeks.
Electronics and entertainment retailer JB Hi‑Fi jumped 3.2% to $19.12 after announcing an 11% increase in full-year profit. Telstra also finished stronger, advancing 0.6% to $5.11, while the big banks each gained between 0.4% and 1.3%.
The Australian dollar was buying about US$0.92 in late trade. The article notes most analysts expect the currency to come under pressure in the months ahead despite a slight recent recovery.
The key takeaway is that positive Chinese economic data can quickly lift base metal prices and Australian miners, which can drive broader ASX gains. During reporting season, investors should also monitor company earnings and guidance, as these reports can materially affect individual stocks and sentiment.
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