THE sharemarket reached a 15-month high yesterday after China's GDP came in at expected levels, which helped buoy the mining sector.
The benchmark S&P/ASX 200 rose 31.2 points, or 0.7 per cent, to 4559.4.
Among the major sectors, materials soared 2.7 per cent, while energy stocks gained 0.8 per cent and financials inched up 0.2 per cent.
The Chinese economy slowed to its lowest rate since early 2009, with gross domestic product growth reported at 7.4 per cent in the September quarter, down from 7.6 per cent in the previous quarter.
Although in line with expectations, some investment banks had forecast a lower result earlier this week.
"[Investors] were getting a bit twitchy about whether it would surprise on the downside," said Patersons Securities strategist Tony Farnham. "When that was found out to not be the case, there was a bit of rally in the markets and that rally was centred around the commodities-driven stocks."
BHP jumped 3.3 per cent, to $34.56, while rival Rio Tinto added 4.8 per cent, to $58.74. Iron ore miner Fortescue rose 2.7 per cent, to $4.18.
Also cheering investors was Spain avoiding its credit rating being dropped to junk status, which contributed to rising markets overnight. "If you looked at the very start of our day, BHP and Rio got off to a flying start, that reflected their performance in Europe and the US," Mr Farnham said.
Woolworths yesterday said first-quarter sales had increased by 4.3 per cent. The result failed to impress investors, with shares falling 0.2 per cent to $29.09.
Ten Network also announced its results, reporting a net loss of $12.9 million for the year to August, compared with a net profit of $14.2 million in the previous corresponding period. The company also said it would be seeking to shed 100 jobs through voluntary redundancies.
Having struggled all week, Ten shares fell a further 1.6 per cent to 30.5?.
Among the banks, ANZ traded relatively flat at $25.95, CBA added 0.1 per cent to $57.05, NAB rose 0.6 per cent to $26.95 and Westpac gained 0.2 per cent to finish at $25.95.
The dollar gained about US1? overnight, pushed up by rises in global sharemarkets as well as an increase in most major metals.
The dollar kept the gains during yesterday's session and was buying US103.85? in late trading.
Mr Farnham said increases in base metals on the London Metal Exchange, the New York markets, as well as precious metals were big factors behind the dollar gaining ground.
Frequently Asked Questions about this Article…
Why did the ASX reach a 15-month high and what is the latest S&P/ASX 200 level?
The market hit a 15-month high after China’s GDP came in line with expectations, which eased downside concerns and boosted commodity-linked stocks. The S&P/ASX 200 rose 31.2 points, or 0.7%, to 4,559.4 on that session.
How did China’s GDP data affect mining shares and materials stocks?
China’s GDP slowed to 7.4% in the September quarter (down from 7.6%), but because it met expectations investors breathed easier and rallied into commodities. Materials led the gains, jumping about 2.7%, as miners and other commodity stocks outperformed.
How did major miners BHP, Rio Tinto and Fortescue perform after the China data?
Major miners rallied: BHP jumped about 3.3% to $34.56, Rio Tinto added around 4.8% to $58.74, and iron ore miner Fortescue rose roughly 2.7% to $4.18.
What happened to Woolworths after it reported first-quarter sales growth?
Woolworths reported first-quarter sales up 4.3%, but the result failed to impress investors and its shares slipped about 0.2% to $29.09.
What were Ten Network’s results and how did the market react?
Ten Network reported a net loss of $12.9 million for the year to August, versus a net profit of $14.2 million in the prior corresponding period, and said it would seek to cut 100 jobs via voluntary redundancies. Ten’s shares fell a further 1.6% on the news.
How did the big four banks trade during the session?
Bank stocks were relatively steady: ANZ traded flat at about $25.95, CBA was up roughly 0.1% to $57.05, NAB rose about 0.6% to $26.95, and Westpac gained around 0.2% to finish near $25.95.
Did the Australian dollar move and what drove its performance?
Yes — the Australian dollar gained overnight, helped by rising global sharemarkets and increases in most major metals. The article notes the dollar kept those gains and was buying around US103.85 in late trading, with rises in base and precious metals cited as key drivers.
What broader market themes should everyday investors note from this report on mining shares and China GDP?
The article highlights that global macro news — notably China GDP meeting expectations and positive credit developments in Europe (Spain avoiding a junk downgrade) — can quickly lift commodity-linked stocks and the ASX. Everyday investors should note how sentiment around China growth and metal prices can drive short-term rallies in mining and materials sectors.
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