The Australian sharemarket finished a low volume session in the black after weaker Chinese and domestic manufacturing data erased stronger gains registered at the open.
Following the rally on Wall Street on Tuesday, the S&P/ASX 200 index rallied in the afternoon to close 15.7 points, or 0.29 per cent, up at 5367.9 points as investors rotated away from the major banks towards cyclical mining stocks.
Fanning doubts about growth momentum in the world’s second biggest economy, the HSBC China manufacturing index dipped 0.3 points to 50.5 points, but new export orders declined for the first time since August, while the official Chinese PMI also fell.
“Meanwhile, selling prices declined for the first time in five months, though only at a fractional rate,” HSBC said. “According to anecdotal evidence, insufficient demand for goods led to some companies discounting their tariffs.”
The Shanghai composite index was off 0.4 per cent at the close of the ASX.
Japanese markets were closed for a public holiday.
The Australian dollar rose 0.6¢ to US89.15¢, but Australian government 10-year yields leapt 9.2 points to 4.327 per cent in a delayed catch up to US yields which hit two-years highs of 3.03 per cent.
Gold jumped $US24 to $US1222 an ounce, copper was little changed at $7360 a tonne and spot iron was also flat at $US134.20 a tonne on Tuesday.
Morgans client adviser Alistair McCorquodale said investors were beginning the year in a good frame of mind thanks to gains overseas.
“We’ve largely seen a risk-on day, given that strong finish in both Europe and the US,” Mr McCorquodale said.
“But it is still pretty light volume.” Local shares had a positive lead from United States and European markets on New Year’s Eve, and from China, which was the only major market open on New Year’s Day.
Among the major resources companies, BHP Billiton rose 21 cents to $38.20, Rio Tinto was 53 cents stronger at $68.71 and Fortescue Metals improved 11 cents to $5.93.
Other miners were also higher, including Newcrest, up 65 cents at $8.45, Regis Resources, up 16 cents at $3.08, and OceanaGold up 13 cents at $1.72.
The banks were relatively flat, with Westpac dropping four cents to $32.34, ANZ losing one cent to $32.22, Commonwealth Bank adding four cents to $78.84 and National Australia Bank steady at $34.83.
Other financial stocks were stronger, with insurer QBE up 19 cents at $11.70 and AMP up four cents at $4.43.
One of the weaker performers was Woodside Petroleum, down 34 cents to $38.56 after a Japanese partner terminated a purchase deal the company. Super Retail also slumped, losing 64 cents to $12.65.
The broader All Ordinaries index was up 16.7 points, or 0.31 per cent, at 5369.8.
The March share price index futures contract was 25 points higher at 5343, with 11,901 contracts traded.
National turnover was 919 million securities worth $1.7 billion.