Positive economic data turns market around

THE sharemarket recovered to finish in positive territory yesterday, pushed up by positive economic data out of China.

By InvestSMART · 22 Sep 2011

By InvestSMART ·
22 Sep 2011

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THE sharemarket recovered to finish in positive territory yesterday, pushed up by positive economic data out of China.

The local bourse opened about 20 points higher, drifted back into negative territory and then rose after lunch. The benchmark S&P/ASX200 index finished up 31.6 points, or 0.78 per cent, at 4071.8, while the broader All Ordinaries index was 28.8 points, or 0.7 per cent, higher at 4153.6.

China's leading economic indicators were up 0.6 per cent in July, sending its market more than 2 per cent higher.

IG Markets strategist Chris Weston said the leading indicators showed China was withstanding Europe's debt crisis and faltering growth in the US. That followed the International Monetary Fund lowering its growth forecasts for the global economy to 4 per cent for this year and next year, and warning of a return to recession if western leaders fail to get their economies back on track.

"China is still that one beacon of global economic strength in a world which seems to be deteriorating before our eyes," Mr Weston said.

He said attention would turn to the two-day meeting of the US Federal Reserve and subsequent interest rate decision.

Healthcare, energy and consumer discretionary sectors led the local market higher.

The best performer among the top 50 was Origin Energy, up 4.98 per cent at $13.49.

CSL also made strong gains, rising $1.27, or 4.67 per cent, to $28.47.

Retail stocks fared well, after David Jones met its financial guidance in delivering a 1.5 per cent fall in annual profit. It also maintained its forecasts for the first half and the shares rose 6? to $2.76.

Harvey Norman added 7? to $2.05, Myer was up 4? to $2.11, and JB Hi-Fi was 12? higher at $15.02.

The big banks and miners were mixed. Commonwealth Bank slipped 42? to $43.95, while the other three big banks clawed back earlier losses to finish positively, with NAB up 19? at $ 22.19, Westpac 8? at $19.31 and ANZ 7? at $19.39.

BHP Billiton was up 33? at $37.13 on a day it revealed chief executive Marius Kloppers's pay grew by 8.5 per cent last year to $US11.6 million.

Rio Tinto rose 69? to $69.59, Oz Minerals lost 12? to $10.54 and Iluka Resources fell 70? to $14.50.

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Frequently Asked Questions about this Article…

Why did the ASX finish higher today and how much did the S&P/ASX 200 rise?

The local sharemarket recovered after positive economic data from China. The benchmark S&P/ASX 200 finished up 31.6 points (about 0.78%) at 4,071.8 and the All Ordinaries rose about 28.8 points (0.7%) to 4,153.6, after opening higher, drifting back and then rising again after lunch.

How did China’s economic indicators influence Australian and global markets?

China’s leading economic indicators were up 0.6% in July, which sent the Chinese market more than 2% higher and helped lift risk sentiment globally, including the ASX. IG Markets strategist Chris Weston noted China was a relative beacon of strength despite weaker growth in Europe and the US, and the IMF had recently lowered global growth forecasts to around 4%.

Which sectors led the market higher on the ASX today?

Healthcare, energy and consumer discretionary sectors led the local market higher according to the report, reflecting strength in several large stocks and retail names that reported or met guidance.

Which ASX top-50 stocks were the best performers in today’s session?

Among the top 50, Origin Energy was the best performer, rising to about $13.49, and CSL also made strong gains, finishing around $28.47. Several retail stocks also performed well after earnings and guidance updates.

How did retail stocks like David Jones, Harvey Norman, Myer and JB Hi‑Fi trade after earnings news?

Retailers fared well: David Jones rose after meeting its financial guidance and maintaining forecasts (shares around $2.76), Harvey Norman and Myer gained (approximately $2.05 and $2.11 respectively), and JB Hi‑Fi was notably higher (around $15.02), reflecting a positive retail reaction to company results and outlooks.

What happened to the big banks on the ASX during this market move?

Big banks were mixed: Commonwealth Bank finished lower at about $43.95, while the other major lenders finished positively — NAB, Westpac and ANZ closed higher at roughly $22.19, $19.31 and $19.39 respectively.

How did major miners and resources stocks perform, and were there any notable company announcements?

Miners were mixed: BHP Billiton rose to about $37.13 on the day it revealed chief executive Marius Kloppers' pay increased by 8.5% to US$11.6 million, Rio Tinto rose to about $69.59, while Oz Minerals and Iluka Resources fell to roughly $10.54 and $14.50 respectively.

What should everyday investors watch next after this China-driven market uplift?

The article highlights that attention will turn to the US Federal Reserve’s two-day meeting and its interest rate decision. Everyday investors might keep an eye on further China economic data, central bank announcements and sector-specific updates, since those factors were driving market moves in this report.