THE sharemarket started the week modestly higher yesterday despite weak trade numbers from China.
Miners led the gains on hopes of economic stimulus from Beijing.
The benchmark S&P/ASX 200 Index rose 8 points, or 0.2 per cent, to 4333.8.
The materials sector was the big winner of the day, rising 2.3 per cent on rising commodity prices and hopes of more stimulus in China. Gold stocks jumped 3.6 per cent. Weighing on the market were financials, down 0.3 per cent, and consumer staples, down 1.8 per cent.
Trade data released in China yesterday showed a 2.6 per cent drop in imports from a year earlier. It showed iron ore volumes had increased over the year by 5.7 per cent, but value had fallen by 20.9 per cent. Despite this, iron ore prices rose by more than 2 per cent yesterday, after the Chinese government approved infrastructure plans worth $US157 billion.
Fortescue jumped 24?, or 7.25 per cent, to $3.55, extending Friday's strong gains.
Rio Tinto rose $2.32, or 4.4 per cent, to $54.70, and BHP added 48?, or 1.5 per cent, to finish at $32.46.
"Fundamentally, even if you're still shipping the stuff to China, the lower income has got to have effects on the economy," said the ANZ Research senior economist Justin Fabo.
"One of those we've already seen, some of the miners are starting to cut heads to decrease their costs to price and protect their profits."
BHP and Xstrata yesterday announced that they would cut a combined 900 jobs from Australian coalmining operations.
The goldminer Newcrest jumped 4.5 per cent, or $1.17, to $27.01, following the rising gold price. Spot gold was at a near six-month high around $US1737 before a US Federal Reserve meeting later this week, with investors hoping for monetary stimulus to help the ailing American economy after disappointing jobs data last week.
Among the banks, Westpac fell 10?, or 0.4 per cent, to $23.60, Commonwealth Bank dropped 12?, or 0.2 per cent, to $54.48, NAB lost 5?, or 0.2 per cent, to $25.01 while ANZ bucked the trend and added 3?, or 0.1 per cent, to finish at $24.19.
Retailers were another big drag on the market, as Woolworths, trading ex-dividend, fell $1.09, or 3.6 per cent, to $29.17. Rival Wesfarmers dropped 19?, or 0.5 per cent, to $34.87.
Qantas added 2?, or 1.6 per cent, to $1.28, extending last week's gains after it announced a 10-year alliance with Emirates to help stem losses in its international arm. The chief executive, Alan Joyce, said Qantas International would break even by 2015.
Among other stocks, the property developer Lend Lease lost 56?, or 6.64 per cent, to $7.88. Senior executives at Lend Lease's construction company, Abigroup, have stood aside while investigations are launched into discrepancies in the company's financial reports.
National turnover was 1.92 billion securities worth $4.38 billion, with 538 stocks up, 434 down and 340 unchanged. with agencies
Frequently Asked Questions about this Article…
Why did the S&P/ASX 200 start the week modestly higher?
The S&P/ASX 200 rose 8 points (0.2%) to 4,333.8 as miners and the materials sector led gains on rising commodity prices and hopes of Chinese stimulus. Materials jumped 2.3% and gold stocks were up 3.6%, while financials (-0.3%) and consumer staples (-1.8%) weighed on the market. National turnover was 1.92 billion securities worth $4.38 billion, with 538 stocks up, 434 down and 340 unchanged.
What drove miners and the materials sector higher on the ASX?
Miners rallied on hopes Beijing would introduce more economic stimulus and on rising commodity prices. Iron ore prices increased after the Chinese government approved infrastructure plans worth US$157 billion, boosting sentiment for materials and gold stocks.
How did China’s trade data affect Australian mining stocks and iron ore prices?
China’s trade data showed a 2.6% drop in imports year‑on‑year, while iron ore volumes were up 5.7% but iron ore value fell 20.9% over the year. Despite weaker trade figures, iron ore prices rose by more than 2% after Beijing approved large infrastructure plans, supporting some miners’ share prices.
Which big miners recorded notable share moves and were there any job cuts?
Fortescue jumped about 7.25% to $3.55, Rio Tinto rose 4.4% to $54.70, and BHP added 1.5% to finish at $32.46. Separately, BHP and Xstrata announced they would cut a combined 900 jobs from Australian coal‑mining operations as companies look to reduce costs and protect profits.
Why did gold stocks and Newcrest perform well?
Gold stocks gained as spot gold climbed to a near six‑month high around US$1,737 ahead of a US Federal Reserve meeting, with investors hoping for monetary stimulus after weak US jobs data. Newcrest jumped 4.5% to $27.01 on the rising gold price.
How did major Australian banks move during the session?
Bank shares were mixed: Westpac fell about 0.4% to $23.60, Commonwealth Bank dropped 0.2% to $54.48, NAB lost 0.2% to $25.01, while ANZ bucked the trend and added about 0.1% to finish at $24.19.
What retail sector news weighed on the ASX and which retailers were affected?
Retailers dragged on the market with Woolworths trading ex‑dividend and falling $1.09 (3.6%) to $29.17, and Wesfarmers down about 0.5% to $34.87. Dividend timing and sector weakness were contributors to the underperformance.
Were there any notable corporate announcements that influenced specific stocks?
Yes. Qantas rose 1.6% to $1.28 after announcing a 10‑year alliance with Emirates and saying Qantas International was expected to break even by 2015. Lend Lease fell 6.64% to $7.88 after senior executives at its construction arm Abigroup stood aside while investigations into discrepancies in the company’s financial reports were launched.
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