A surge in domestic jobs and lack of negative Chinese news pushed the Australian sharemarket higher but the knee-jerk rally faded as economists downplayed the jobs data.
The S&P/ASX 200 index was up 0.4 per cent before the jobs data and it surged to a 0.8 per cent gain before sliding to close 28.4 points, or 0.53 per cent, up at 5412.6 as the steady unemployment rate of 6 per cent underscored warnings the labour market remained soft.
Economists warned statistical sample rotations accounted for about a third of the increase of 47,300 jobs created in February, while the positive data was also undermined by a 0.9 per cent drop in total hours worked.
“There needs to be consecutive months of strong job creation before we change are fairly bleak view of the labour market,” Forex.com strategist Chris Tedder said.
“And, we see last month’s data as an outlier, as opposed to the start of a new trend of strong trend of job creation.”
The Australian dollar leapt US0.7¢ to US90.60¢ on the news, while government two-year yields rose 7.2 per cent to 2.851 per cent as the data swung the rate yield slightly back towards a tightening bias.
The Shanghai composite index was up 1.1 per cent at the close of the ASX led by banks as officials outlined plans to introduce a bank deposit insurance scheme.
Premier Li also confirmed that the 7.5 per cent growth target was flexible to the upside and downside, and admitted this year would be “complicated” as the country dealt with rebalancing growth and tackling dangers from shadow banking and pollution.
In Tokyo the Nikkei index was up 0.4 per cent.
Gold climbed $US16 to a seven-month high of $US1374 an ounce, steel rebar futures bounced 1.2 per cent and spot iron ore bounced 2.4 per cent to $US107.40 a tonne yesterday.
However, signalling ongoing stress in metals markets, copper slipped 0.5 per cent to $US6470 a tonne.
CMC Markets analyst Michael McCarthy said materials stocks had led the charge.
"The market’s been led higher by a resurgence in interest in mining stocks led by iron ore and gold miners,” Mr McCarthy said.
"Markets appear to be settling a little from their concerns about the growth prospects for the world raised by that weaker than expected export number from China over the weekend.
"Buying was fairly strong ahead of the release of Chinese industrial numbers late today, he said.
"It will either confirm or deny that weaker picture painted by that poor export read,” Mr McCarthy said.
Mining stocks were the strongest performers as the iron ore price stabilised and the gold price rose.
Mining giant BHP Billiton added 41 cents to $36.40 and Rio Tinto gained $1.68 to $63.07.
Fortescue gained 15 cents, or three per cent, to $5.12 and Atlas Iron was 5.5 cents higher at 97.5 cents.
The banks also rose, with Westpac up 31 cents at $34.25, Commonwealth Bank adding 21 cents to $75.96, ANZ gained five cents to $32.23 and National Australia Bank was 21 cents higher at $34.76.
Telstra was flat at $5.08.
The broader All Ordinaries index was up 28.6 points, or 0.53 per cent, at 5429.1.
The March share price index futures contract was 40 points higher at 5413, with 31,036 contracts traded.
National turnover was 1.6 billion securities worth $4.2 billion.