Shares buoyed by jobs data
The Australian sharemarket has closed higher, recovering from a one-month low, as miners rose on upbeat comments from Rio Tinto and a surprise drop in unemployment.
The benchmark S&P/ASX200 index rose 20.5 points, or 0.5 per cent, to 4295.6, while the broader All Ordinaries index gained 21.6 points, or 0.5 per cent, to 4353.8.
Gains were led by the gold sector, which jumped 4.2 per cent, recovering from yesterday's slump. Materials rose 1.7 per cent, energy gained 0.9 per cent, while financials were the main drag on the market, falling 0.5 per cent after ANZ went ex-dividend.
The jobless rate unexpectedly dropped to 4.9 per cent in April, when economists had expected it to rise to 5.3 per cent, up from 5.2 per cent in March.
China data worries
After a jump on that data, the market briefly traded lower after China's iron ore imports slid to a six-month low in April, down 8 per cent from a month earlier.
But buyers emerged at the lows, encouraged to bargain hunt after the past week's fall of 3.2 per cent on concern political upheaval in Greece and Spain could slow the world economy. Stock futures were pointing to gains at the start of trade in Europe and on Wall Street.
CMC Markets sales trader Ben Taylor said the unemployment number was encouraging to investors who were also pondering the negative factors of slowing import growth in China and the continued uncertainty over whether Greece would proceed with economic austerity measures.
‘‘The unemployment read was better than expected, and that’s sent the market higher,’’ Mr Taylor said. ‘‘Even after the unemployment data came out a little bit better than expected, I think people still do expect a rate cut.
‘‘I think people are buying this market on the idea that the Aussie dollar will continue to fall, and our prospects will get better once the (official interest) rates are down around 3 per cent.’’
ANZ goes ex-dividend
Among the major banks, National Australia Bank was 4 cents lower at $24.57 despite its six-month profit rising to a record $2.83 billion. ANZ was down 97 cents to $22.15 after the stock went ex-dividend, Commonwealth Bank gained 24 cents to $51.90, and Westpac added 6 cents to $22.90.
In the resources sector, global miner BHP Billiton was 29 cents higher at $34.62. Rio Tinto was 71 cents richer at $61.94 as Rio’s chairman told shareholders that he was more confident about the global economic picture than he was six months ago.
Among other stocks, News Corp rose 89 cents to $20.16, and its non-voting stock advanced 93 cents to $19.96 after third-quarter net profit rose 47 per cent.
SingTel was steady at $2.53 as SingTel-owned telco Optus said net profit for fiscal 2012 rose 1.5 per cent to $787 million despite intense competition from rivals. But Telstra took a breather after its recnt rally, losing 0.3 per cent, or 1 cent, to $3.64.
Fuel supplier and distributor Caltex Australia scraped off 1 cent to $13.39 as it said an ongoing review of the future of its loss-making refineries is focusing on the Kurnell refinery in Sydney.
Construction giant Leighton Holdings was 17 cents higher at $19.35 after it was awarded $800 million in gas and water infrastructure contracts in Queensland.
Rougher patch ahead
"While the market may be oversold and due for a bit of a bounce, and we're seeing a bit of that today, in a broader sense the risk is that we could see more weakness over the next couple of months as these issues in Europe continue to unfold and result in worries about global growth," said AMP Capital strategist Shane Oliver.
"The easy gains we had earlier in the year are probably behind us and we're into a rougher patch. I think by year end we'll be higher, my target's 4800, but we have entered a period that is seasonally soft," Mr Oliver said.
BusinessDay, with wires