Relief as sharemarket snaps losing streak
Six-day losing streak ended yesterday on Chinese economic June quarter growth data.
Six-day losing streak ended yesterday on Chinese economic June quarter growth data. THE sharemarket snapped a six-day losing streak yesterday after Chinese economic growth for the June quarter came in bang-on economists' expectations.It may have been the slowest annual growth rate in three years, at 7.6 per cent, but investors were unconcerned. They cheered because there were no surprises, and because China's authorities appeared to be successfully managing a slowdown in economic activity - the vaunted ''soft landing'' - while curbing inflation without killing growth.The news lifted resource and financial stocks, and helped the sharemarket close the week on a high, delivering a week's-end reprieve to investors, who had spent the previous six days watching the market track backwards.The S&P/ASX 200 Index gained 14.2 points, or 0.35 per cent, to 4082.2 for the day. But for the week it lost 75.6 points, or 1.8 per cent.''If [China's economic growth figure] had come in at much lower than consensus forecast, [then] you would have seen a negative reaction,'' said HSBC Australia's head of asset management, Geoff Pidgeon.''China is in a tradeoff between inflationary pressure, asset bubbles, and growth ? That's why they've really put the brakes on growth over the past year ? [and] we think they can actually handle this balancing act quite well.''The dollar strengthened on the news but fell in late trade, unable to hold onto the early gains. It closed at US101.58?, down from US101.64?.Yesterday evening, European sharemarkets had advanced in opening trade as dealers welcomed the reports, setting aside news of a Moody's ratings downgrade for debt-laden Italy.IG analyst Cameron Peacock said there was a collective sigh of relief around the globe on the China news, with short positions established over the previous 24 hours being quickly unwound.''[On Thursday] you saw big names in BHP and Rio getting sold off quite heavily, and I said ? we were either going to be justified in the sell-off, or it was going to be seen as an overreaction,'' Mr Peacock said.''Find me another country that's growing at 7.5 per cent growth domestic product on the base size of what China is ? it just seems a massive beat-up to me.''Doom and gloom is the default position of the market at the moment.''Among the big miners, BHP Billiton finished 8? higher at $30.48 after a three-year closing low on Thursday. But Rio Tinto lost 17? at $54.08.The big banks all improved, Westpac rising 18? to $22.05, NAB 13? to $23.60, ANZ 17? to $22.35 and Commonwealth 26? to $53.77.Specialty Fashion shed 2? to 50? after it warned full-year earnings would halve.DuluxGroup rose 1? to $3.04 after it again extended a takeover timetable for its bid for building products supplier Alesco, which was 2? weaker at $1.97.With AGENCIES