Australian shares pared their losses on Wednesday as stronger-than-expected GDP growth data saw the resource-rich economy tie the world record for the longest period without a recession.
Australian shares pared their losses on Wednesday as stronger-than-expected GDP growth data saw the resource-rich economy tie the world record for the longest period without a recession. Australia’s gross domestic product growth came in at 0.3 percent in the first quarter from the previous three months, beating a 0.2 percent predicted by analysts to cap nearly 26 years of continuous expansion – equal to the Netherland’s 103-quarter record.
The S&P/ASX 200 index was down 0.2 percent, or 12.874 points to 5,654.6 by 0317 GMT, recouping some of the 0.4 percent losses from earlier in the day. The headline GDP number and gains in consumption expenditure paint a positive economic growth outlook for the next quarter in Australia, said Ric Spooner, chief market strategist at CMC Markets.
Globally, elections in the U.K., a potentially dovish stance by European Central Bank at its policy meeting and former FBI director James Comey’s Senate testimony, all set for Thursday, could provide catalysts for investors. In Australia, the material and mining index was up 0.3 percent thanks to strength in gold stocks as the yellow metal surged to seven month highs.
Newcrest Mining was up 0.8 percent, while Evolution Mining rose 1 percent. Rio Tinto was up 1 percent. The miner on Wednesday detailed pricing for a $781 million cash tender as part of its already announced $2.5 billion bond buyback to reduce its debt.
A rise in copper on the London Metals Exchange also lent support. BHP, which has significant oil interests, was 0.6 percent lower as oil and iron ore eased. The energy sector, though, was driven higher by a gain of up to 5.8 percent by coal miner Whitehaven Coal
Other energy stocks eked out modest gains as well ahead of inventory data from the U.S. later in the week. Woodside Petroleum, however, was 0.2 percent lower. The declines on the benchmark, were led by consumer stocks as Wesfarmers fell 3.4 percent, its lowest in nearly 7 months, while rival Woolworths was down 0.4 percent. The consumer sector has been pressured due to concerns about falling household spending as a property boom appears to be cooling off.
New Zealand’s benchmark S&P/NZX 50 index was 0.7 percent, or 49.94 points, down at 7,445.03. The decline was broad-based with consumer stocks leading the losses as EBOS Group Ltd and Fletcher Building Ltd lost 1.7 percent.