SYDNEY, Oct 18: Australian shares rose 0.6 percent on Friday, extending gains after Washington pulled off an 11th-hour deal that prevented a potentially catastrophic U.S. Debt default, with attention shifting to a batch of data from China later in the day.
Simon Twiss, a dealer at Arnhem Investment Management, said that with the U.S. Debt drama now behind markets investors would start to focus more on company fundamentals.
Twiss said that China, Australia’s biggest export market, will remain on markets’ radar.
Investors will get a chance to gauge the pulse of the world’s second-biggest economy when Beijing releases a batch of data later on Friday, including GDP, fixed asset investment and industrial production.
‘It’s hard to judge which one(s) the market will react to. However, going on previous months, fixed asset investment and industrial production will be key,’ said IG market strategist Evan Lucas in a note to clients.
Still, ‘if the GDP figure is better than expected it will override all of this and the whole region will shift higher,’ he said.
The S&P/ASX 200 index added 33.3 points to 5,316.4 by 0135 GMT, after hitting the highest level at 5,319.4 for the year. The benchmark index inched up 0.4 percent to 5,283.1 on Thursday.
Some analysts believe economic weakness resulting from the 16-day U.S. Government shutdown and uncertainty over the next round of budget and debt negotiations may keep the U.S. Federal Reserve from withdrawing monetary stimulus at least until a few months into next year.
‘With the central bank convening next week, macro watchers will be hanging on every word in the press about the possible direction the Fed will take come Wednesday,’ Lucas said.
Big banks and defensive stocks underpinned the Australian market, with top lender the Commonwealth Bank of Australia adding 0.3 percent and National Australia Bank NAB.AX climbing 0.8 percent. The country’s biggest supermarket Woolworths Ltd gained 1.1 percent.
A jump in gold prices boosted gold miners such as Newcrest Mining Ltd, which rose 5.9 percent.
Discovery Metals Ltd surged 13.3 percent after the company said at its annual general meeting that it was evaluating an inicative non-binding refinancing proposal.
Paladin Energy Ltd soared 9.3 percent, extending a rally after the uranium miner said its mines were operating at record levels with production costs trending lower.
Warrnambool Cheese and Butter Factory Company Holdings Ltd jumped 6.4 percent to a record high after shareholder Murray Goulburn announced plans to join a bidding war for the company with a A$420 million ($405 million) offer.
Santos Ltd slipped 1.3 percent after the energy producer reported its third quarter production dropped 1 percent.
New Zealand’s benchmark NZX 50 index pulled back 0.1 percent to 4,771.2.
(agencies)
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