The Australian share market closed sharply higher after a day spent unexpectedly in positive territory, bolstered by strong data out of China and a largely positive deluge of local economic data. Energy stocks led the way, with the sector rallying 1.9 per cent, while Consumer Discretionary, Financials and Materials also seeing gains.
The S&P/ASX 200 index closed 53 points up to finish at 5,188. The value of trades was $4.09 billion on volume of 758 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Commonwealth Bank of Australia
(ASX:CBA) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 70 points up.
Economic news
The latest National Australia Bank retail sales survey says Australia’s online spending rose to $14.1 billion in the year to July, equivalent to 6.3 per cent of traditional retail sales.
The Australian Industry Group says manufacturing activity in Australia fell for the 26th consecutive month in August, however the rate of decline is slowing. The AIG Performance of Manufacturing Index (PMI) was 46.4 in August, up 4.4 points from July.
TD Securities and the Melbourne Institute’s monthly inflation gauge was 0.1 per cent in August, coming off a 0.5 per cent increase in July and a flat result in June. The annual rate to August was 2.1 per cent, down from 2.7 per cent in July.
The Australian Bureau of Statistics (ABS) says building approvals increased 10.8 per cent to 14,304 in July, exceeding the expectations of analysts. Over the year to July, building approvals are up 28.3 per cent.
Also from the ABS, business indicators for the June quarter showed a 0.8 per cent fall in company gross operating profits. Estimated business inventories meanwhile rose 0.2 per cent in the quarter, slightly ahead of expectations.
Company news
Woodside Petroleum Limited
(ASX:WPL) has announced its Browse joint venture partners will use floating liquefied natural gas (FLNG) technology to commercialise the three Browse gas fields off Western Australia. The move quashes the desires of WA premier Colin Barnett, who had hoped for a job creating onshore project. Shares in Woodside closed 0.94 per cent up at $38.54.
Virgin Australia Holdings Limited
(ASX:VAH) is reportedly in the firing line to receive a compensation claim from Qantas’s low cost carrier Jetstar, after an airport accident grounded one of its Airbus A320’s. According to various media reports, Jetstar is considering compensation options based on damage to the aircraft- which was clipped by a Virgin 737- as well as the time it has remained out of service. Shares in Virgin closed 3.85 per cent up at $0.41.
Rio Tinto Limited
(ASX:RIO) shares firmed after it loaded the first shipment of iron ore from its expanded port, rail and mine operations in Western Australia, which will see overall capacity for Rio’s WA operations increase to 290 million tonnes annually.
Transfield Services Limited
(ASX:TSE) shares jumped 9.61 per cent after the election of independent non-executive Director Diane Smith Gander to succeed outgoing Chairman of the board Tony Shepherd. Mr Shepherd says the appointment is ideal and Smith Gander will aptly continue to oversee the board’s turnaround of Transfield.
Billabong International Limited
(ASX:BBG) shares surged 14.12 per cent after the retailer received a request from Coastal Capital International to convene an extraordinary general meeting and consider the removal of the current directors of the company, aside from founder Gordon Merchant and Colette Paull.
Forge Group Limited
(ASX:FGE) shares climbed 8.33 per cent after the construction and engineering company secured a $1.47 billion engineering, procurement and construction contract at the Roy Hill iron ore mine project in Western Australia, alongside JV partner, Spanish contractor Duro Felguera.
Best and worst performers
The best performing sector was Energy adding 258 points to close at 14,028.
The worst performing sector was Utilities, losing 11 points to close at 5,464.
The best performing stock in the S&PASX 200 was Billabong International Limited
(ASX:BBG), rising 14.12 per cent to close at $0.48. Shares in Transfield Services Limited
(ASX:TSE) and NRW Holdings Limited
(ASX:NWH) also closed higher.
The worst performing stock was Discovery Metals Limited
(ASX:DML), dropping 9.68 per cent to close at $0.14. Shares in OceanaGold Corporation
(ASX:OGC) and Resolute Mining Limited
(ASX:RSG) also closed lower.
Commodities
Gold is trading at $US1,395 an ounce. Light crude is $1.15 down at $US108 a barrel.
The Australian dollar
The Australian dollar is buying $US0.8987.
