Views Article – Sharenet Wealth

Australasia, News

Australia, NZ hit fresh closing peaks on positive global data, trade deal

* Aussie benchmark index sees second straight weekly gain

* Mining sector top performer

* NZ benchmark hits third straight closing high (Updates to close)

By Nikhil Subba

Jan 17 (Reuters) – Australian shares notched a record closing high on Friday for a fourth straight session, as markets cheered positive global economic data while still basking in the afterglow surrounding the freshly signed Sino-U.S. Phase 1 deal.

The S&P/ASX 200 index rose 0.3% to close at 7,064.10, following a 0.7% firmer finish on Thursday. The benchmark rose about 2% on a weekly basis, its second straight week of gains.

Demand for risky assets improved after data on Friday showed China’s economy grew 6.0% in the fourth quarter of 2019 from a year earlier, and 6.1% for the full year, in line with analysts’ expectations and within the government’s official target, which allayed growth worries.

Meanwhile, data also showed that China’s December industrial production grew 6.9% from over a year ago, surpassing a Reuters poll forecast of 5.9%, while retail sales for 2019’s last month came in 8% stronger, beating expectations of 7.8% growth.

“These numbers suggest that China’s economy has stabilised following exhaustive efforts by the government and central bank,” ING analysts said in a note.

“The negative direction of travel by China’s economy may have been abated.”

China is Australia’s top trading partner and the domestic economy’s fortunes depend on the health of the world’s second largest economy.

Sentiment was further lifted by data that showed U.S. retail sales rose 0.3% in December, in line with economists’ estimates, which led major indexes on Wall Street to close at record highs overnight.

Global risk appetite has largely improved after Beijing and Washington inked a Phase 1 trade pact on Wednesday, marking a major step in defusing the prolonged spat that rattled financial markets and weighed on global growth.

Australia’s mining stocks were the day’s best performers, closing up 1.4% at a near six-month peak, helped by stronger iron ore prices. The sub-index rose 2.8% this week, its biggest weekly gain since Dec. 13.

BHP Group rose 1.2% to its highest since July 31, while Rio Tinto climbed about 2% to a more than six-month peak, despite the Anglo-Australian miner reporting a 3% drop in iron ore shipments in 2019.

Technology stocks finished up 0.4% at a record high, propped by software giant Wisetech’s 0.4% climb and Appen’s 4.4% surge.

Buy-now-pay-later company Sezzle Inc said on Friday that a Californian regulator had approved its application for a lending license, after having been rejected earlier in the month.

The heavyweight financial sector ended marginally higher at a near two-month peak, with three of the ‘big four’ lenders finishing in the positive territory. The sub-index marked its second consecutive weekly gain.

Bucking the trend, energy stocks settled down 0.7%, as oil prices slipped, with industry heavyweight Santos inching 0.8% lower while Woodside Petroleum shed 1.2%.

New Zealand’s benchmark S&P/NZX 50 index rose 0.5% to finish at 11,800.21, its third straight record closing high. On a weekly basis, the New Zealand benchmark gained 2.2%, biggest since late November. (Reporting by Nikhil Subba in Bengaluru; Editing by Shailesh Kuber)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.
Array ( )