The ASX gained ground for the second time in four sessions, with investors moving back into the banks as concerns over a global tit-for-tat trade war faded.
"Australian shares are vulnerable to the concerns impacting global markets – particularly US inflation and Fed fears and worries about a trade war – but we remain of the view that the ASX 200 will be higher by year end," said Shane Oliver, head of investment strategy at AMP Capital.
The S&P/ASX 200 index advanced 40 points, or 0.7 per cent, to 5942, while the All Ordinaries rose 41 points, or 0.7 per cent, to 6046 and the Australian dollar traded at US78.31¢.
Thursday's gains came after signs that there will be some leeway in the US tariffs on steel and aluminium that could be introduced as soon as Thursday US time, with the latest signals coming from reports that that Trump administration will initially exclude Canada and Mexico from the proposed tariffs.
Investors are concerned that trade tensions will halt the global economic upswing that has provided the backdrop for equity market gains both in Australia and overseas. Signs of that economic progress emerged on Thursday with trade data from Australia and China as well as through GDP data from Japan.
Bank share prices have proved to be sensitive to sentiment around trade and the sector moved firmly higher on Thursday, with CBA up 1.4 per cent at $76.17, Westpac up 0.4 per cent at $30.00, ANZ up 0.5 per cent at $28.35 and NAB higher by 1.3 per cent to $30.08. Outside the big four, Macquarie shares jumped 1.8 per cent to $104.02.
Investors went bargain hunting in other sectors as well, with CSL shares up 1.3 per cent at $163.84 and A2 Milk, up 4.7 per cent at $12.25.
Miners were lower, however, with both BHP and South32 trading without rights to their latest dividend payouts. BHP shares fell 2 per cent to $28.82 and South32 dropped 2.7 per cent to $3.25.
Around 28 companies went ex-dividend on Thursday. The ASX was among their number and the stock exchange operator fell 1.4 per cent to end the session at $57.39.
"A total of 92 per cent of Australian companies either raised or maintained their dividends in the most recent reporting season indicating a high degree of confidence in the earnings and growth outlook," noted Dr Oliver at AMP.
- With wires
Stockwatch - BlueScope Steel
BlueScope Steel drifted down 0.6 per cent to end the day at $15.74 with UBS analysts saying that, while short-term sentiment around the steelmaker is mixed, the long-term outlook is compelling. "We think the near-term outlook for US spreads is influencing investors' views," the analysts said, while noting that investors appear to be wondering how high steel prices can rise. "While we expect some short-term volatility as markets assess the impact of proposed steel tariffs, we remain comfortable with the long-term outlook. We also think the market has yet to pay up for growth potential within the ASEAN business," the analysts said.
Australia's strong surplus
Australia recorded a trade surplus of $1.1 billion in January after exports rose 4 per cent and imports fell 2 per cent, data from the ABS showed. Economists had been expecting a trade surplus of $0.16 billion, according to consensus estimates. The trade deficit recorded in December was revised to $1.1 billion. The trade balance was in surplus for seven consecutive months in 2017 before it fell into deficit in December.
China's fast-paced exports
China's exports rose at the fastest pace in three years in February, suggesting its economic growth remains resilient. China's February exports rose 44.5 per cent from a year earlier, compared with analyst forecasts for a 13.6 per cent increase, and an 11.1 per cent gain in January, official data showed. Imports grew 6.3 per cent, missing analysts' forecast for 9.7 per cent growth, and down from a sharper-than-expected 36.9 per cent jump in January.
Japan's economy expanded at an annualised rate of 1.6 per cent in the final three months of 2017, revised up from a preliminary estimate of 0.5 per cent growth, due to an upward revision to capital expenditure, Japan's Cabinet Office said. The revised gross domestic product figure compared with a median estimate of 0.9 per cent growth expected by economists. On a quarter-on-quarter basis, GDP rose a revised 0.4 per cent in real, price-adjusted terms.
Women on board?
Women accounted for 47 per cent of board appointments across the ASX 200 companies in the first two months of 2018, up from 36 per cent a year ago, and now make up 26.7 per cent of directorships, according to a report from the Australian Institute of Company Directors. The findings, released on International Women's Day, show that the number of top 200 companies which have no women around the board table now stands at five, down from 14 last year.