The Australian sharemarket reversed yesterday’s drop after an uptick in domestic jobs data, US Federal Reserve chairman Janet Yellen promising to keep interest rates low and Chinese trade data soothing growth pessimism.
The S&P/ASX 200 index followed the global rally, climbing 41 points, or 0.75 per cent, to 5476.8 after Ms Yellen said global benchmark US rates would be maintained “for a considerable time after the asset purchase program ends”.
The Australian dollar rose US0.3¢ to US93.70¢ after the economy created 14,200 new jobs in April, slightly better than the 8,800 consensus forecast, with no change in part-time jobs. Government 10-year yields were marginally softer at 3.824 per cent
Discussing dollar resilience, National Australia Bank global head of currency strategy Ray Attrill said the switch from construction phase to the production phase of the “resources boom” would support the dollar.
“But the combination of the high degree of foreign ownership of the mining sector, the US dollar-functional currency status of the big miners and low marginal production costs in the iron ore and LNG sectors, means that a large proportion of the revenues generated from the ramp-up in resources exports will not flow back into Australia or its currency,” he said.
The Shanghai composite index was up 0.7 per cent at the close of the ASX after the Chinese imports and exports both beat forecast with increases of 0.9 per cent and 0.8 per cent respectively, leading to a trade surplus $US18 billion.
Export growth was better than the headline suggested as the “over-invoicing” of Hong Kong and Taiwanese trade faded and exports to the rest of the world rose 10.2 per cent.
In Tokyo the Nikkei index rose 0.7 per cent.
Gold fell $US20 to $US1290 an ounce and copper fell 0.7 per cent to $US6670 a tonne. Spot iron ore lost 0.8 per cent to $US105.20 a tonne, and Dalian iron ore futures were off almost 3 per cent.
Morgans senior private client adviser Bill Chatterton said markets were a bit in limbo, with investors unwilling to push them much above or below the 5400 point market unless there was a catalyst.
"The market is arguably pretty well priced but generally investors don't want to sell aggressively because the yields are still good in the big ones,” he told AAP.
"It is not cheap and it's not expensive and we are in that phase at the moment."
Australian job figures for April showed the unemployment rate steady at 5.8 per cent.
National Australia Bank said its half year profit grew by 8.5 per cent to $3.15 billion, following strong profit numbers from Westpac and ANZ in the last week in what are regarded as good signs for the economy.
NAB shares were up 30 cents at $34.14, Westpac gained 40 cents to $34.90, Commonwealth Bank improved 54 cents to $79.09 and ANZ was three cents higher at $33.80.
The resources sector made gains, with BHP Billiton up 48 cents at $37.65, Rio Tinto lifting 86 cents at $61.46 and Fortescue Metals 19 cents higher at $4.82.
Shareholders liked Qantas's announcement that it would cut 2,200 staff by the end of June, and plans to have nearly all of its 5,000 cuts completed 12 months later.
Shares in the airline gained 2.5 cents, or 2.1 per cent, to $1.245.
The broader All Ordinaries index was up 36.8 points, or 0.68 per cent, at 5,455.9.
The June share price index futures contract was 39 points higher at 5459, with 27,011 contracts traded.
National turnover was 1.2 billion securities worth $3.8 billion.