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Australian Market Wrap
Australian equities advanced, extending yesterday’s gains after North American and European markets climbed sharply overnight. Hence, the S&P/ASX 200 reached its highest level in five trading days this morning, before the market pared upside after Chinese industrial production and economic growth missed expectations. Nevertheless, China’s Shanghai Composite rose as much as 0.8 percent, extending this week’s advance to nearly 3 percent on expectations that the nation’s 8.1 percent growth in the first quarter has finally marked the bottom of a ‘soft landing’ cycle.
Materials rallied, with the sector continuing to attract fresh interest after commodities extended upside, reflecting a weaker Greenback. Metals & Miners – BHP Billiton (A$34.47, +1.7%), Fortescue (A$5.92, +4.2%), Newcrest (A$29.24, +0.9%), Rio Tinto (A$65.95, +2.3%) – were all well bid. Lynas (A$1.11, +7.8%) jumped after a Kuala Lumpur court rejected an attempt to review its rare earths refinery permit. Flinders Mines ($0.22, trading halt) remained in a halt after MMK’s motion to lift an injunction on the acquisition of Flinders was rejected by a Russian court.
Intrepid Mines (A$0.76, +11.8%) surged, leading the ASX 200 after Standard & Poor’s said that proposed mining regulations in Indonesia may not be implemented in full. Atlas (A$2.91, +3.9%) rose following news that the miner is planning another iron ore project in the Pilbara. Eldorado (A$13.79, +9.4%) surged after the Gold Miner unveiled plans to more than double production. Oil & Gas Producers – Aurora Oil & Gas (A$3.76, +1.3%), Santos (A$14.00, unch), Woodside (A$34.76, +1.6%) – were mixed as Brent Crude fell to session lows at $121.03/bbl.
Financials tracked the market, albeit with consolidation in some of the Major Banks – ANZ (A$22.98, unch), CBA (A$50.18, +0.8%), NAB (A$24.80, +0.9%), Westpac (A$22.12, +0.3%) – as rotation into resources remained the dominant trade. Macquarie (A$28.99, +2.8%) rallied as European periphery spreads further narrowed. Insurance Australia Group (A$3.45, +0.9%) was little changed after its 49 percent owned AmG insurance made a A$483 million acquisition of Kurnia Insurans Berhad. Finally, Telecom Corp of New Zealand (A$2.00, +1.0%) said that it secured a three year, NZ$600 million credit facility.