The Australian sharemarket ended its losing streak as a dearth of market moving news provided the ideal opportunity for traders to drive a low volume bounce.
Overnight US stocks finished 0.3 per cent down, and most Asian markets struggled, but the S&P/ASX 200 index climbed 41.7 points, or 0.8 per cent, to 5275.9 points on volume about 20 per cent below average, with no obvious catalyst.
Gold bounced off its overnight low of $US1309 to $US1326, but copper was flat at $US7147 a tonne after falling 1.3 per cent overnight on renewed concerns over Chinese growth momentum. Spot ion ore edged up 0.2 per cent to $US132.70 a tonne.
Bloomberg reported that a China Beige Book private sector survey of businesses contrasted with official measures.
A spokesman said the results “show the conventional wisdom of a renewed strong expansion in China to be seriously flawed.”
The Shanghai composite index was up 0.2 per cent at the close of the ASX, while in Tokyo the Nikkei index was down 0.6 per cent.
Peking University professor Michael Pettis said in a report that while analysts were revising Chinese growth targets, “nothing fundamental has really changed in the past few months”.
“Economic conditions in China will only have genuinely improved when Beijing can generate GDP growth without requiring even faster growth in credit,” he said
Overnight data confirmed the loss of global growth momentum. In Europe the German IFO business confidence index missed forecasts, while in the US the Case-Shiller 20 city house price index miss forecasts with a 0.6 per cent gain, consumer confidence fell and the Richmond Fed index was unchanged.
The Australian dollar slipped 0.2¢ to US93.70¢ and government 10-year yields slipped 2.3 points to 3.88 per cent after the Reserve Bank’s semi-annual Financial Stability report reflected a benign view on house prices and household debt loads.
The Reserve said banks should “maintain prudent risk appetite and lending practices, especially in the low interest rate environment” but its hands-off attitude led markets to suggest it was not likely to raise interest rates to curb rising property prices.
But there appeared to be no major driver behind the gains, with CMC Markets chief market strategist Michael McCarthy saying some stocks had posted almost inexplicable rises.
One of those was department store David Jones, which rose 14 cents, or 4.9 per cent, to $2.99 despite a six per cent fall in its annual net profit to $95.2 million.
Its underlying profit rose slightly to $101.6 million, but Mr McCarthy said the result looked poor and the outlook was gloomy.
“The only explanation I can put on it is that the market was expecting a lot worse in terms of their strategic initiatives and potential write-downs,” he said.
Other retailers also rose, with Myer up two cents at $2.67 and JB Hi-Fi up 14 cents at $20.92.
Energy stocks rose despite several days of oil price falls, suggesting traders were speculating on a bounce in the oil price.
Oil Search added 29 cents to $8.79, Santos gained 23 cents to $15.33 and Woodside was 25 cents higher at $38.85.
BHP Billiton improved 13 cents to $36.00 and Rio Tinto gained 31 cents at $62.41.
“For most of the day, all sectors were in positive territory, but there’s no detectable investment theme here,” Mr McCarthy said.
“The Australian market is marching to its own tune today.”
Markets in Japan and China fell on Wednesday.
Telstra was steady at $4.93 as it announced 1,100 job cuts as part of a restructure of its operations business.
Among the banks, Commonwealth dipped six cents to to $72.84, but Westpac advanced 37 cents to $33.11, ANZ found 42 cents at $31.41, and National Australia Bank lifted 68 cents to $35.30.
The broader All Ordinaries index was up 40.6 points, or 0.78 per cent, at 5270.1 points.
The December share price index futures contract was 31 points higher at 5273 points, with 21,484 contracts traded.National turnover was 1.38 billion securities worth $3.85 billion.