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 200 reach a 15-month high on the day covered in the article?
The S&P/ASX 200 rose 31.2 points (0.7%) to 4,559.4 after China’s September-quarter GDP came in at 7.4%—in line with expectations—which relieved downside fears and sparked a rally, especially in commodity-linked stocks.
How did China’s GDP data affect Australian mining stocks and the materials sector?
Because China’s GDP growth matched forecasts (7.4% for the September quarter), investors were less worried about a weaker outcome. That helped lift commodity prices and saw the materials sector jump 2.7%, with mining stocks leading the market rally.
Which major miners moved the most, and what were their share price changes?
BHP jumped 3.3% to $34.56, Rio Tinto added 4.8% to $58.74, and iron ore miner Fortescue rose 2.7% to $4.18—all cited in the article as beneficiaries of the commodities-led rally.
What other international news supported the market lift aside from China GDP?
Markets were also boosted by Spain avoiding a downgrade to junk credit status, which helped sentiment in Europe and the US, and by rises in base and precious metals on exchanges such as the London Metal Exchange and US markets.
How did consumer and media companies like Woolworths and Ten Network perform?
Woolworths reported first-quarter sales up 4.3% but its shares fell 0.2% to $29.09. Ten Network reported a net loss of $12.9 million for the year to August (versus a $14.2 million net profit the prior year), said it would seek about 100 voluntary redundancies, and its shares fell a further 1.6% to 30.5.
What happened to the major Australian banks on that day?
Bank stocks were relatively steady: ANZ traded flat at $25.95, CBA rose 0.1% to $57.05, NAB gained 0.6% to $26.95, and Westpac increased 0.2% to finish at $25.95.
Did the Australian dollar move, and what drove that movement?
Yes—the Australian dollar gained ground, helped by rising global sharemarkets and higher metal prices. The article reports the dollar was buying US103.85 in late trading and had picked up about US1 (as reported) overnight.
What’s the practical takeaway for everyday investors from this market update?
The article highlights that markets can react strongly to macro data and commodity price moves—China’s GDP matching expectations eased panic and sparked a commodities-driven rally. For everyday investors, this is a reminder that exposure to mining and commodity-sensitive stocks can amplify moves tied to global data and metal prices.
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