Stocks up sharply on renewed China hopes
THE market closed yesterday at its highest in five weeks after better than expected Chinese economic growth increased already buoyant investor sentiment.
THE market closed yesterday at its highest in five weeks after better than expected Chinese economic growth increased already buoyant investor sentiment.Figures showed the world's second-largest economy grew by 8.9 per cent in the December quarter. Although that was the slowest rate of expansion for 30 months, it exceeded analysts' expectations of about 8.5 per cent growth.Australian shares extended gains driven by a successful sale of French treasury bills overnight, despite Standard & Poor's having stripped the European Union's second-largest economy of its AAA credit rating.News that Fortescue Metals and Rio Tinto had exceeded their iron ore production targets helped resource stocks post gains of more than 2 per cent."With Chinese data failing to fall off a cliff as some analysts suspected, the hard landing scenario is looking unlikely in the short term," said IG Markets' Stan Shamu.At the close, the S&P/ASX 200 Index was up 68.4 points, or 1.7 per cent, at 4215.6.Fortescue Metals jumped 18?, or 3.9 per cent, to $4.80, after the company announced it had shipped a record 14.77 million tonnes of iron ore in the December quarter while reducing production costs.Shares in Rio Tinto gained 81?, or 1.3 per cent, to $65.70 after its global iron ore operations produced a record 65 million tonnes in the December quarter, beating analysts' forecasts.The results added to hopes that BHP Billiton would top its own expectations when it reports its production results today. BHP put on 72?, or 2 per cent, to $36.70, its highest close since December 8."The latest announcement from Fortescue is helping confidence in the mining sector," said CommSec chief economist Craig James. "We're at the point where China is looking to invigorate their economy and this is going to help our mining sector."Wesfarmers climbed 55?, or 1.8 per cent, to $30.55 after it announced that coal production at its Curragh mine was 2.2 million tonnes for the December quarter, down 1.7 per cent on the previous quarter.Uranium miner Paladin Energy rose 18?, or 11.8 per cent, to $1.71 after it reported record production in the three months to December 31 and reaffirmed full-year production targets.Arafura Resources climbed 9.5?, or 25 per cent, to 47.5? after the minerals explorer reported it had successfully produced rare-earths oxide samples for potential customers.The spot gold price was up $US20.11 at $US1658.76 an ounce at the close of Australian trading.