The Australian share market has snapped a four day losing streak after easing investor concerns about China’s debt-laden property sector prompted a jump in local mining stocks.
The benchmark S&P/ASX200 index on Friday closed 61.1 points, or 0.83 per cent higher, at 7443 points.
The All Ordinaries climbed 64.6 points, or 0.84 per cent, to close at 7765.8 points.
Sentiment was largely driven by a sense of relief over Chinese property giant Evergrande, while investors also shrugged off concerns from a surprisingly strong US inflation reading.
But the tone was set by news that Evergrande had managed to make coupon payments to avoid a formal default that would have worsened a debt crisis in the China’s property market and led to knock on effects in the construction and steel sectors.
“Obviously, that’s tied to demand for raw materials, specifically steel, and with the outlook improving for Chinese property developers, that has helped push the miners higher,” said Tom Piotrowski, market analyst at CommSec.
All sectors bar healthcare ended higher, with materials, energy and consumer staples leading the march.
In the local market, iron ore exporters BHP, Rio Tinto and Fortescue Metals were the biggest beneficiaries of the improved investor sentiment. BHP and Rio shares ended about three per cent higher, while FMG gained two per cent.
Goldminers also benefited, with Evolution Mining and Regis Resources lifting about 1.0 per cent as investors put faith in bullion amid inflation concerns.
Those worries were underpinned by the US consumer price index rising 6.2 per cent year-on-year in October, the strongest advance since November 1990.
Local energy stocks were also higher after crude oil prices climbed above $US83 a barrel, with Santos and Oil Search trading around two per cent higher, while Woodside gained one per cent.
Consumer stocks were led by the supermarket giants, with Coles climbing two per cent, while rival Woolworths and Metcash gained about one per cent each.
Healthcare shares bucked the trend, dragging the market. Gloves manufacturer Ansell and medical equipment firm ResMed were the biggest culprits, ending 2.6 per cent and 1.6 per cent lower respectively.
The technology sector also had a good day, with Link Services and Xero gaining 3.0 per cent each.
Shares in junior explorer Greenland Minerals dived nearly 30 per cent to 8.8 cents each after Greenland’s parliament passed legislation to ban uranium mining that will hit the Australian company’s Kuannersuit mine.
The market closed about 0.3 per cent lower for the week.
The Australian dollar eased against a firm US dollar after the strong US inflation reading. It was trading at 72.92 US cents against the greenback, down from 73.11 US cents at Thursday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed higher by 61.1 points, or 0.83 per cent, to 7443 on Friday.
* The All Ordinaries ended up 64.6 points, or 0.84 per cent, at 7765.8.
* At 1700 AEDT, the SPI200 futures index was unchanged at 7438 points.
CURRENCY SNAPSHOT
One Australian dollar buys:
* 73.11 US cents, from 73.11 cents on Thursday
* 83.27 Japanese yen, from 83.31 yen
* 63.74 Euro cents, from 63.68 cents
* 54.54 British pence, from 54.48 pence
* 103.98 NZ cents, from 103.79 cents.
