Chinese growth hopes swept aside weak domestic GDP data and US Federal Reserve tapering fears to lead the Australian sharemarket into the black today.
Following the softer lead from Wall Street last night, the S&P/ASX 200 index opened 0.3 per cent down, but it rallied along with Chinese stocks to close 17.7 points, or 0.34 per cent, up at 5273.8 points.
Miners led the rebound after spot iron ore climbed one per cent to $US138.40 yesterday as port supplies continued to rise, although copper remained little changed at $US6960 a tonne and gold flat at $US1221 an ounce.
The Australian dollar fell US0.8¢ to US90.60¢ after September-quarter GDP growth of 0.6 per, 2.3 per cent annualised, cent missed forecasts for 0.7 per cent and 2.6 per cent respectively.
“There was very little in the September quarter national accounts to support any optimism about the economy,” Westpac economists said.
Consumer spending growth slowed to well below trend at 0.4 per cent while the contribution from housing construction was “disappointing” and a 5.5 per cent drop in government spending remained an “ongoing headwind”.
“Overall this report emphasises that the Australian economy is likely to require further stimulus in order for growth to lift back towards trend,” Westpac said.
However, Australian government 10-year yields eased just 1.6 points to 4.306 per cent as Fed tapering fears kept global borrowing costs simmering.
National Australia Bank global head of currency strategy Ray Attrill said there was no news to drive overnight moves of lower stocks and a weaker US dollar.
“The moves are all fully consistent with position trimming/risk reduction in front of the week’s key US economic releases and which are seen having major bearing on whether or not the (Fed) decides to announce an initial tapering of its $85 billion per month QE bond buying programme as early as December 18,” he said.
The Shanghai composite index was up 1.3 per cent at the close of the ASX despite Chinese President Xi Jinping saying the environment for economic and social development next year “isn’t optimistic”.
The rally was driven by consumer discretionary stocks and industrial stocks.
In Tokyo the Nikkei index fell 1.7 per cent as the yen rallied against the US dollar.
Bell Direct equities analyst Julia Lee said sharemarket gains in China had buoyed local traders.
"The energy and materials space is strong and commodities prices did well overnight with iron ore up one per cent,” Ms Lee said.
"We’re seeing buying coming back through."
Australia’s big iron ore-focused miners benefited from a boost in the iron ore price to above $US138 a tonne.
Global mining giant BHP Billiton was up 35 cents at $36.80 following losses of 4.5 per cent in the last three days.
Rival Rio Tinto gained 80 cents to $66.29, Fortescue was up 16 cents at $5.63, but gold miner Newcrest slumped nine cents, or 1.2 per cent to $7.16 and is at more than 10-year lows amid weak gold prices.
Atlas Iron shares rose 7.7 per cent to $1.19 after saying it’s close to finalising contracts for around 60 per cent of next year’s production after clinching some new deals.
Among the four major banks, Westpac was down five cents to $32.35, Commonwealth gained 25 cents to 76.80, ANZ added five cents to $31.76 and National Australia Bank had gained 19 cent to $34.38.
Electronics retailer Dick Smith debuted on the stock market, closing at its issue price of $2.20.
The broader All Ordinaries index was up 17.9 points, or 0.34 per cent, at 5267.5.
The December share price index futures contract was 29 points higher at 5283, with 31,428 contracts traded.
National turnover was 1.7 billion securities worth $3.9 billion.