Shares managed a last-gasp gain – making it six straight sessions of rises – after banks sunk an early rally, with miners buoyed by better-than-expected Chinese economic data.
Australian shares were set to close lower, breaking a five-day winning streak, after a promising rally driven by the Chinese data petered out in the afternoon.
But the market rallied in the last few minutes of trading. The S&P/ASX 200 index added 6 points, or 0.1 per cent, to 5325, while the All Ordinaries closed 5 points up at 5312.5.
Opening at 5307, the ASX200 spiked to 5331 on the back of a small rise in US equities overnight.
However, the market eased ahead of the release of Chinese GDP at 1pm, said Morgan Stanley’s head of investment strategy Malcolm Wood.
The market’s morning rise “was what you’d expect following the strong US lead”, said Mr Wood. “And I guess people were saying, we have the Chinese data coming out at 1 o’clock … we don’t want to be taking big positions into that.”
Chinese GDP grew at an annualised rate of 7.3 per cent in the third quarter, which was down from the previous quarter’s 7.5 per cent rise, but still above market expectations of a 7.2 per cent rise. The strong point of the data was industrial production, which grew at an annualised rate of 8 per cent – far ahead of the expected 7.5 per cent figure.
The market lifted sharply after the Chinese data was released but then fell back, eventually heading into negative territory. “Obviously it hasn’t rallied on since the China data,” said Mr Wood. “The industrial production number was a little bit better than expected. That would settle some nerves about China, a little bit at least.”
BBY senior client adviser Henry Jennings said China and the imminent bank reporting season weighed down on the market.
“It has been flat – there’s been a little disappointment with the Chinese GDP number.
“We’re running into bank reporting season, we’re only nine or 10 days away from that. The big driver in the market has been the bounce in the banks and I think a few people are just looking at them, thinking they’ve had a good run, and taking some money off the table just in case.”
The big four banks were mixed. Westpac dived 16 cents, or 0.5 per cent, to $33.41, CBA fell 8 cents, or 0.1 per cent, to $77.18, while NAB rose 8 cents, or 0.2 per cent, to $33.52 and ANZ rose 2 cents to $32.47.
Newcrest Mining stocks fell 3 cents to $9.78 after the miner announced it would keep its guidance for the full year unchanged. Newcrest reported a 12 per cent fall in gold production for the September quarter due to lower grades of the precious metal and planned plant shutdowns.
Gold output fell to 561,731 ounces in the three months ending September 30 from 586,573 in September 2013.
Veda Group was one of the market’s worst performers, diving 15 cents to $2.17 on news that its private equity shareholder has abandoned a planned sale of its stake.
Among the miners, Rio rose 0.4 per cent to $59.97, BHP fell 9 cents, or 0.3 per cent, to $33.75 and Fortescue rose 9 cents to $3.55.
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