THE market put on 1.1 per cent yesterday after positive Chinese trade data buoyed investors already encouraged by positive US earnings and hopes for a pick-up in Australian buyout deals.
Official figures showed exports from Australia's largest trading partner rose 13.4 per cent last month compared with a year earlier on increased demand for Chinese goods from Japan and emerging markets.
The figures added to a promising start to the US earnings season and spurred hopes that the global economy might start to emerge from the global economic downturn this year.
At the close, the S&P/ASX 200 Index was up 46.8 points, or 1.1 per cent, at 4152.2.
Markets also took heart from news of a further pick-up in private equity deals. Shares in Pacific Brands surged 14.3 per cent to 64? after the clothing maker confirmed it had received an unsolicited takeover approach from US-based private equity firm KKR.
The offer "has added a bit of spark to an otherwise lacklustre market", said
EL & C Baillieu Stockbroking director Richard Morrow.
It came a day after Spotless Group told private equity suitor Pacific Equity Partners that a $743.4 million offer would be needed to obtain a unanimous recommendation from the board.
Shares in the contract cleaner ended down 0.8 per cent at $2.35 after PEP hinted that it would not raise its offer, describing the $711 million price tag as "highly attractive". It said yesterday it could not progress its proposal without access to due diligence.
Nonetheless, the rise in activity "has got a few sharemarket tragics excited that if their shares get cheap enough then private equity will come along and make them an offer", Mr Morrow said.
Materials and energy stocks were among the day's biggest winners, with both sectors up on improved investor appetite for riskier investments.
Aluminium maker Alumina jumped 6.9 per cent to $1.17, helped by positive leads from joint-venture partner Alcoa, which opened the US reporting season by delivering results that beat the market consensus.
CMC Markets chief market analyst Ric Spooner said investors would be watching the US earnings season over the next month before the start of the Australian reporting season.
"If these signs of improved demand translate into better than expected revenue growth for companies, it will become difficult for investors to ignore equities at current earnings multiples," he said.