The Australian sharemarket rallied towards its six-year high as tensions eased in Ukraine and investors wagered on a market friendly speech from US Federal Reserve chairman Janet Yellen at the annual Jackson Hole conference on Friday.
Following a strong overnight session the S&P/ASX 200 index climbed 36.7 points, or 0.66 per cent, to 5623.8 on a high volume rotation to miners led by BHP Billiton ahead of its earnings report and news of its restructuring.
Investors ignored soft iron ore prices and Chinese stocks and also looked on the bright side of the Reserve Bank’s August monetary policy meeting minutes that “highlighted uncertainty” in the domestic economy.
Westpac economist Mathew Hassan said the word “uncertainty” was absent from the July minutes but was used several times this month, including in reference to key points such as the growth outlook.
But he said the Reserve was “a very long way from acting on its concerns”.
The Australian dollar rose US0.2¢ to US93.40¢ while government 10-year yields climbed 6.8 points to 3.414 per cent.
The Shanghai composite index remained out of step with global markets and was off 0.1 per cent at the ASX having earlier fallen 0.5 per cent as stimulus hopes eased.
The Shanghai market was supported by a surge in media stocks after President Xi Jinping said the nation would build a few media groups into influential content providers.
“(Chinese) Officials have repeatedly delivered economic slowdowns that were more severe than they intended, forcing them to subsequently re-stimulate the economy,” Lombard Street Research analyst Dario Perkins wrote in a report.
“The latest ‘go’ phase for growth reflects another mini official stimulus, together with an improvement in exports. While stronger growth can continue in the short term, we think the economy faces serious macroeconomic challenges over the next 3-5 years.”
In Tokyo the Nikkei index was up per cent.
Spot iron ore eased to $US93.30 a tonne yesterday while Dalian iron ore futures fell 0.6 per cent.
Copper rose 0.5 per cent to $US6905 a tonne while gold was steady at $US1300 an ounce.
OptionsXpress market analyst Ben Le Brun said the local bourse had enjoyed strong trading today despite several big stocks, including the Commonwealth Bank, trading ex-dividend.
Investors anticipate strong earnings figures from BHP Billiton, which reports its annual results after the market closes.
"It’s been a very strong outperformance just ahead of the BHP earnings number,” Mr Le Brun said.
Mr Le Brun said most of the company earnings reports out on today had been better than expected, and the easing of geopolitical concerns in Ukraine had also helped push the market higher.
He said the financial results for retailer Dick Smith, which is not among the market’s top 200 companies, had been particularly impressive.
In the resources sector, according to preliminary figures, BHP Billiton was 53 cents higher at $39.68.
Rio Tinto was up $1.05 at $66.40, and Fortescue Metals improved 10 cents to $4.62.Steel and mining group Arrium jumped nine cents, or 11.92 per cent, to 84.5 cents after it lifted its full year profit by 83 per cent.
Oil Search eased 12 cents to $9.33 despite increasing its first half net profit by 34 per cent and forecasting higher production and sales.
The banking sector was mixed. Commonwealth Bank was down $1.41 at $79.99 after paying out its final dividend.
National Australia Bank dipped 29 cents to $33.93, after a disappointing quarterly trading update yesterday.
Westpac lifted 53 cents to $34.78, and ANZ gained 27 cents at $32.82.
Insurer QBE was in a trading halt after it said it would sell off or float businesses in three continents, including Australia, as it works to get back on track after another disappointing profit slide.
QBE last traded at $10.71. Insurance Australia Group firmed three cents to $6.29 after its profit soared 59 per cent and more growth was flagged.
Retailer Dick Smith surged 17.5 cents, or 8.77 per cent, to $2.17 after it beat its prospectus forecasts and tipped sales growth in the year ahead.
The broader All Ordinaries index was up 37.8 points, or 0.68 per cent, at 5618.4 points.
The September share price index futures contract was up 52 points at 5581 points, with 32,236 contracts traded.
Preliminary national turnover was 1.9 billion securities worth $5.26 billion.