Australian shares rose on Wednesday, gaining after better than expected Chinese manufacturing data boosted sentiment, while a continued rise in financials helped offset losses in the energy and basic materials sectors. The S&P/ASX 200 index was up 0.3 percent, or 15.51 points, at 5,733.40 by 0317 GMT. The benchmark finished 0.2 percent higher on Tuesday. Consumer stocks and industrials got a lift after an official survey showed China’s manufacturing sector in May grow in line with the previous month, beating expectations and reassuring markets the world’s second-largest economy isn’t losing too much steam. The services sector, which comprised over half of China’s economy last year, grew faster in May from April.
“The PMI came in little bit above expectations. It has been sliding over the last two to three months, and the fact that it has stabilised a bit is a positive for the market more broadly,” said Damien Hennessy of Heuristic Investment Systems. Gains in the consumer sector were driven by a 4 percent rise in the shares of gaming machine maker Aristocrat Leisure . The company reported solid half-year earnings last week driven by growth in overseas markets.
Industrials were supported by a 1 percent rise in toll road developer Transurban Group. Australia’s big banks, whose earnings outlook remains pressured by regulatory challenges, saw temporary respite in the previous session after the Australian government delayed the start date of the first payment of its new bank levy by three months. The ‘Big Four’ banks held their gains, rising in a range of 1 percent to 1.3 percent. Macquarie Group, Australia’s fifth biggest bank, was 1.8 percent higher.
Mining majors BHP Billiton and Rio Tinto were off 0.7 percent and 1.2 percent respectively, while iron-ore miner Fortescue Metals Group lost 0.6 percent. The most-active iron ore contract on the Dalian Commodity Exchange dropped as much as 3.2 percent to be down around 30 percent since mid-March. Nonetheless performance of manufacturing figures showed China’s steel industry expanding at its fastest pace in a year in May.
The ASX’s energy index shed 0.8 percent on lower oil prices as rising output from Libya added to concerns about increasing U.S. production undermining OPEC-led output cuts. New Zealand’s benchmark S&P/NZX 50 index was marginally lower at 7,405.74 as losses in consumer stocks outweighed gains in financials. Building materials maker Fletcher Building Ltd was among the top losers on the main board, and single-handedly pulled the consumer sector lower.