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Australian shares near 5-year highs, miners in the spotlight

Australian shares have closed 1.1% stronger today on strong buying in resources-focused stocks, particularly iron ore players, following the release of better-than-expected trade data out of China. Dow Futures were 1 point lower, while the Shanghai Composite Index jumped 2 points, or 0.1%.
Australian shares near 5-year highs, miners in the spotlight

An increase in exports in Australia’s largest market, China, spurred investors on today, with the spotlight firmly on the miners.

The near 5-year highs were also driven by Wall Street’s record highs and yesterday’s Reserve Bank of Australia’s decision to cut interest rates.

The ASX All Ordinaries climbed 1.1%, or 55.2 points, to 5,177.9 points and the benchmark S&P/ASX 200 jumped 1.1%, or 56.1 points, to 5,199.8 points.

China's exports rose 14.7% in April from a year earlier, which should ease ongoing concerns over the strength of the world's second-largest economy.

Iron ore stocks charge on
higher China imports

China has imported the highest amount of iron ore in four months in April as greater steel production boosted demand. 

The nation imported 67.15 million tonnes of iron ore in April, an increase of 16.4% from the same month last year.

Atlas Iron (ASX: AGO) broke a key downtrend line yesterday at A$0.87. With spot iron ore up 1.5% overnight, its first rise in three weeks, Atlas shares opened above the recent resistance level of A$0.925.

Short covering from Asian hedge funds accelerated as the stock broke above A$1 following China's stronger-than-expected trade data reported Wednesday.

Signs of recovery in the world's two major economies are encouraging news for iron ore miners, although they will face further tests next Monday, when China's industrial production, fixed assets investment and retail sales data are due.

Miners rally

The broader Materials sector soared 2.1%, or 198.8 points, to 9,627.4 points.

Mining heavyweight Rio Tinto (ASX: RIO) led the charge up with a $1.51, or 2.6%, gain to $58.90.

Fellow major BHP Billiton (ASX: BHP) followed suit with a $0.63, or 1.9%, increase to $34.30. Fortescue Metals Group (ASX: FMG) jumped $0.20, or 5.4%, to $3.89.

Mineral sands producer Iluka Resources (ASX: ILU) was a top dollar gainer, notching a $0.70, or 7%, increase to $10.65, as was copper-gold explorer Sandfire Resources (ASX: SFR), which added $0.39, or 6.4%, to close at $6.44.

Also in the Materials sector, engineering giant Monadelphous Group (ASX: MND) climbed $0.43, or 2.1%, to $21.19.

Financials stronger on RBA decision

Unsurprisingly, banks gained ground today after interest rate cuts were slashed further yesterday

The overall Financials sector rose 1.3%, or 74.4 points, to 5,809.2 points.

Three of the big four made it into the top dollar risers, with the Commonwealth Bank of Australia (ASX: CBA) putting on $0.93, or 1.3%, to close at $71.23.

National Australia Bank (ASX: NAB) climbed $0.42, or 1.3%, to $33.37 and Westpac Banking Corporation (ASX: WBC) rallied $0.37, or 1.1%, to $32.95.

ANZ (ASX: ANZ) also closed the day in the green with a $0.27, or 0.9%, rise to $31.46.

Investment bank Macquarie Group (ASX: MQG) shifted up $0.47, or 1%, to $45.08.

Notable movers

While the larger Healthcare sector found itself going against the rise and ending the day in the red, some of its occupants managed to buck the trend to close higher. The Healthcare sector dropped 2.1%, or 273.8 points, to 12,770.4 points.

Hearing device developer Cochlear (ASX: COH) closed $1.19, or 1.8%, higher at $68.14, while protection solution provider Ansell (ASX: ANN) added $0.49, or 3.1%, to close at $16.48.

Medical diagnostics company Sonic Healthcare (ASX: SHL) rose $0.36, or 2.7%, to $13.88.

Dow closes above 15,000 for first time

U.S. stocks continued to soar and hit record highs overnight, and by the close the Dow Jones had added 87 points to 15,056 points, while the S&P 500 jumped 8.46 points to 1,625.96 points.

Tech-stocks though missed the rally, with the NASDAQ only gaining 0.1%, or four points, to 3397.

Asian markets

Hong Kong’s Hang Seng ratched up 152.8 points, or 0.7%, to 23,199.9 points, while Japan’s Nikkei climbed 105.4 points, or 0.7%, to 14,285.7 points.

The Shanghai Composite Index was 2 points, or 0.1%, stronger at 2,237.6 points.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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December 13 2016

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