australian stocks surge higher led by energy and chinese growth 1705212015

Australian stocks had another winning session on Wednesday, building upon the strong gains of the previous day, as investors took a favourable view of better-than-expected growth data from China that was also in-line with the government’s target. The energy sector too helped propel indices higher as stocks reacted positively to a rally in crude prices, as did the strong overnight close on Wall Street.

Indices and sectors

The benchmark S&P/ASX 200 rose 58.8 points, or 1.0 per cent, and closed at 5,636.2, while the broader All Ordinaries index was up 57.1 points, or 1.0 per cent, at 5,619.

The top gaining sectors were energy (+2.44 per cent), consumer staples (+2.09 per cent), healthcare (+1.76 per cent), utilities (+1.40 per cent), consumer discretionary (+1.31 per cent) and industrials (+1.01 per cent). There were no losing sectors for the second successive day.

Stocks

Mining stocks had a mixed day. BHP Billiton Limited (ASX:BHP) lost 0.74 per cent at AU$26.90, Rio Tinto Limited (ASX:RIO) was up 0.09 per cent to AU$53.12 and Fortescue Metals Group Limited (ASX:FMG) fell 0.84 per cent to AU$1.77. Struggling mining services group Bradken Limited (ASX:BKN) leapt 16.82 per cent to AU$1.25 after the company told investors that it was on track to meet its underlying earnings forecast of between AU$136 million and AU$138 million for 2014-15. The stock was the top gainer on the S&P/ASX 200. On the other hand, BHP Billiton is to write down US$3.76 billion (AU$2.68 billion) in US oil and gas assets following weak product prices.

In energy, Woodside Petroleum Limited (ASX:WPL) was up over 3 per cent at AU$34.96, Origin Energy Ltd (ASX:ORG) gained 1.87 per cent to AU$11.44, Oil Search Limited (ASX:OSH) shot up 2.16 per cent to AU$7.11 and Santos Ltd (ASX:STO) rose 2.89 per cent to AU$7.83.

Banks were up across the board. Commonwealth Bank of Australia (ASX:CBA) gained 1.01 per cent to AU$87.12, Westpac Banking Corp (ASX:WBC) shot up 1.16 per cent to AU$34.00, Australia and New Zealand Banking Group (ASX:ANZ) was up 0.68 per cent to AU$32.42 and National Australia Bank Ltd. (ASX:NAB) gained 0.93 per cent to AU$33.78.

In retailers, with the exception of Metcash Limited (ASX:MTS), which lost 1.4 per cent at AU$1.05, other stocks ended higher. Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, shot up 2.54 per cent to AU$41.58, Woolworths Limited (ASX:WOW) gained 2.09 per cent to AU$28.30, Caltex Australia Limited (ASX:CTX) was up 2.45 per cent to AU$34.23 and Myer Holdings Ltd (ASX:MYR) rose 2.02 per cent to AU$1.26. Almond grower Select Harvests Limited (ASX:SHV) surged 9.29 per cent to AU$12.24, an eight-year high, after the company announced it upgraded its volume and price estimates for its current crop in view of strong demand and restricted supply of almonds. The stock was the second-biggest gainer on the S&P/ASX 200.

Economic news, currency and market outlook

As Greece heads into a crucial vote on the latest bailout proposals, anti-austerity protesters have resorted to violence against police and hurled dozens of petrol bombs. Riot police have responded with tear gas against the crowds, according to ABC, which said this was the most serious violence in over two years.

The widely followed Westpac-Melbourne Institute Index of Consumer Sentiment showed that consumer confidence fell 3.2 per cent in July to 92.2, driven chiefly by the Greek bailout crisis and the massive Chinese share market collapse, according to ABC.

China surprised analysts by reporting a rise of 7 per cent in its GDP during the second quarter of 2015, surpassing expectations of 6.8 per cent. The economy showed “moderate but stable and sound momentum of development,” said China’s National Bureau of Statistics.

Stocks were mostly unchanged on Wall Street, consolidating after four consecutive days of gains, with investors playing it cautious ahead of Greece’s crucial bailout parliamentary vote. The Dow Jones Industrial Average gave back 3 points to 18,050, the S&P 500 lost 2 points to 2,107, and the Nasdaq Composite retreated 6 points, or 0.1 per cent, to 5,099.

The Australian dollar is trading sharply lower after US Fed Chair Janet Yellen said there was a good likelihood that US interest rates would rise this year. At 04:45 this morning (AEST) the local currency was trading at 73.73 US cents, down from 74.72 US cents on Wednesday.

The Australian stock market is likely to open mostly flat today given that at 06:45 am (AEST) this morning the September ASX SPI200 Index (AP) Futures was up 4 points at 5,588.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.