Strong Chinese trade data sparks turnaround
The benchmark S&P/ASX 200 Index clawed back more than half of its losses from Wednesday, lifting 1per cent to 5064.8 points.
The surge came after the exports of Australia's biggest trading partner, China, rose 5.1 per cent in July compared to a year earlier, while imports jumped 10.9 per cent. Economists had expected a rise of 3 per cent in exports and 2.1 per cent in imports.
St George Bank chief economist Besa Deda said that "helped the Asian sharemarket rally and that has fed on to the [local] currency".
But although investors warmed to the data, uncertainty about the health of world's trade after the release of Australian employment figures showed the jobless rate second-biggest economy still lingers, Ms Deda said.
Despite the strong trade figures pushing the dollar up half a cent to US90.55¢, Ms Deda expected the currency to come under pressure in the months ahead.
"By the end of the year you will have an eight in front and it will gradually drift lower," she said. "The data in China is positive but overall there is still some uncertainty about the Chinese economic outlook and I think that will pressure the Aussie dollar, too."
The dollar's lift came after it fell more than half a cent to as low as US89.73¢ in earlyremained at a four-year high in July, at 5.7 per cent, with the economy losing 10,200 jobs.
Telstra led the charge on the stock exchange, rising 12¢, or 2.4 per cent, to $5.13 after the telco delivered a 12 per cent rise in annual profit to $3.9 billion following strong growth in customers.
Rio Tinto firmed 88¢ to $59.48 as investors awaited half-year results, due out just as the market closed. BHP rose 1.2 per cent to $35.31.
The big four banks were higher, with ANZ up 29¢ to $29.39 and Commonwealth Bank 92¢ to $73, while NAB and Westpac advanced 0.7 per cent to $30.74 and 1.2 per cent to $30.91 respectively.
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The article says stronger Chinese trade data — exports up 5.1% year‑on‑year and imports up 10.9% in July (vs economists' expectations of +3% and +2.1%) — helped lift the S&P/ASX 200 about 1% to 5,064.8 points. The Australian dollar also rose roughly half a cent to about US90.55¢ after earlier falling to around US89.73¢.
China's July trade showed exports rising 5.1% year‑on‑year and imports jumping 10.9%. Economists had expected exports to rise about 3% and imports about 2.1%, so both readings came in stronger than forecast, which helped spur the Asian and local market rally.
St George Bank chief economist Besa Deda said the data helped push the Aussie higher in the short term but she expects the currency to come under pressure in the months ahead. She told the article that “by the end of the year you will have an eight in front and it will gradually drift lower,” signalling a likely move into the 80‑cent range later in the year.
Telstra led the gains, rising 12¢ (2.4%) to $5.13 after reporting a 12% rise in annual profit. Rio Tinto firmed 88¢ to $59.48 as investors awaited half‑year results, and BHP rose about 1.2% to $35.31. The big four banks were also higher: ANZ, Commonwealth Bank, NAB and Westpac all advanced.
Telstra climbed after reporting a 12% increase in annual profit to $3.9 billion, driven by strong customer growth. The article links that profit result directly to Telstra’s share price gain on the day.
Rio Tinto firmed 88¢ to $59.48 as investors awaited the company's half‑year results, which were due out just as the market closed. BHP also rose, gaining about 1.2% to $35.31 — both moves reflecting resource sector sensitivity to news and reporting schedules.
The article notes some caution after employment data: the jobless rate remained at a four‑year high of 5.7% in July and the economy lost about 10,200 jobs. That weakness helped keep uncertainty about the global trade and economic outlook in investors’ minds despite the strong China trade prints.
Based on the article, everyday investors should keep an eye on further China trade updates, upcoming company results (for example Rio Tinto’s half‑year results), and domestic employment data — all of which can influence the ASX 200, major stocks like Telstra, BHP and Rio Tinto, and the Australian dollar.
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