The Australian sharemarket has got off to a positive start for the New Year, but fell short of analyst expectations it would continue the precedent of the past couple of years to gain in excess of 1 per cent on the first trading day of the year.

At the local close on the first trading day of 2014, the dollar was ­buying US89.13¢, up from US89.21¢ at the 2013 close.

On Thursday, the benchmark S&P/ASX 200 Index gained 23.6 points, or 0.4 per cent, to 5375.8 with the country’s biggest miners leading the bourse, buoyed by resilient commodity prices. The gains came despite a dip in Chinese factory activity.

The local market took a strong lead from offshore after major equity markets in the United States, Europe and Asia closed higher before trading closed for the new years holiday.

CommSec economist Savanth Sebastian tipped the benchmark index to grow close to 10 per cent in 2014 to finish the year between 5400 and 5700 points. Market Matters stockbroker and principal Shawn Hickman said he expected the benchmark index to fall back towards 4800 points in early 2014, followed by a sustained rally to fresh highs above 5500 points.

Metals and mining was the best-performing ­sector on Thursday, up 1.1 per cent as Reserve Bank of Australia data showed the prices of iron ore and thermal coal increased in November, while gold, coking coal, wheat and base metals declined.

Overall, the RBA’s index of commodity prices for November rose 0.1 per cent, after declining 0.4 per cent in October. In Australian dollar terms the 0.1 per cent rise translated to an increase of 1.5 per cent.

In China meanwhile, data showed manufacturing activity dipped in December. The final HSBC - Markit China manufacturing purchasing managers index for December read 50.5, unchanged from the earlier flash reading.

The official China manufacturing PMI for December, released on January 1, dipped 0.4 per cent in December to 51 points, its lowest reading in four months.

Despite the data major iron ore producers finished the day higher.

BHP Billiton added 0.6 per cent to $38.20, while Rio Tinto gained 0.8 per cent to $68.71 as the spot price of iron ore, landed in China, remained steady at $US134.20 a tonne.

Mr Hickman is tipping the resources sector to rebound in 2014, led by BHP Billiton and Rio Tinto as the biggest miners shift their strategies away from large capital spends and return more capital to shareholders.

“If any mining company starts to significantly increase capital expenditure in the current environment, I will look to exit immediately,” he said.

Fortescue Metals jumped 1.9 per cent to $5.93. The miner is Mr Hickman’s top pick in the resources space due to its pure iron ore exposure and increasing cash flow and decreasing debt levels.

The spot price of gold, which dumped 28 per cent in 2013 in its biggest annual fall since 1981, started the new year trading higher at $US1222.63 per ounce.

Australia’s biggest goldminer, Newcrest Mining, jumped 8.3 per cent to $8.45, while Silver Lake Resources was the best-performing stock, climbing 18.7 per cent to 63.5¢. The junior goldminer was the biggest loser in the benchmark index in 2013, shedding 83.9 per cent.

Mr Hickman is predicting a solid bounce in gold stocks in the first half of 2014. “Many gold stocks, notably Newcrest Mining and OceanaGold, are currently trading well below 40 per cent of their book value. The sector was much unloved in 2013, reminding me of the retail sector in 2012 prior to its 75 per cent appreciation in 2013.”

Aurizon, which operates industrial rail freight lines in Queensland, rose 0.8 per cent at $4.92 as the Queensland government urged miners to get started on new projects to take advantage of its discounted royalty scheme in the Galilee basin, while ruling out extending the perk to other parts of the state.

Embattled mining services contractor Forge Group was the worst-performing stock as it dropped back 12.6 per cent to $1.52 after rallying more than 55 per cent earlier in the week.

Mining services was one of the worst-performing sectors in 2013. Mr Hickman said he still has “no interest in picking bottom in mining services except on a few weeks trading basis”.

Australia’s biggest oil producer, Woodside Petroleum, dropped 0.9 per cent to $38.56 amid speculation Shell is preparing to move to sell its 23 per cent interest valued at roughly $7.4 billion. The Brent crude oil price edged higher to $US111.06 per barrel.

Buccaneer Energy slumped 21.7 per cent to 1.8¢ despite emerging from a trading halt to show it had sealed a series of deals to improve its balance sheet. The Alaska-focused oil and gas explorer struck a deal to sell $US65 million worth of assets, re-arranged its debt financing, and announced a $60 million equity raising.

The major mortgage lenders were mixed as a key indicator of house prices showed property values are still rising, albeit more slowly. The RP Data-Rismark Home Value index showed dwelling values across Australia’s capital cities increased by 0.1 per cent in November, much weaker than the increases of 1.6 per cent in September and 1.3 per cent in October.

“Dwelling prices across Australian capital cities finished the year strongly underpinned by low interest rates, rising 9.8 per cent in 2013, the fastest annual growth rate in three years,” St George economist Besa Deda said.

Commonwealth Bank edged up 0.1 per cent to $77.84, while National Australia Bank was flat at $34.83, and ANZ Banking Group edged 1¢ lower to $32.22.

Westpac Banking Corporation edged down 0.1 per cent to $32.34, following the news it has completed its acquisition of a $1.45 billion portfolio of Australian asset and corporate loans from the UK-based Lloyds Banking Group.

Insurance Australia Group, the parent company of insurers NRMA and CGU, added 0.3 per cent to $5.84, after increasing its insurance protection from $5 billion in 2013 to $5.6 billion in 2014. IAG finance chief Nick Hawkins said the company had “taken the opportunity of more favourable reinsurance market conditions to bolster key aspects of its catastrophe protection”.

Australia’s biggest insurer, QBE Insurance Group, climbed 1.7 per cent to $11.70.

Other major stocks that pulled the index higher included Telstra Corporation, up 0.2 per cent to $5.26, and shopping mall operator Westfield Group, up 0.8 per cent at $10.17.

Department store operator Myer Holdings Australia rose 0.4 per cent to $2.76 as the company re-opened its website following a week long glitch that saw it apologise to customers during the crucial January sales period. Rival David Jones was flat at $3.02.

Mr Hickman said that the retail sector “still feels vulnerable” and advised taking profits following the 2013 rally, with the exception of the two major food and liquor retailers.

In the groceries sector on Thursday, Woolworths rose 0.1 per cent to $33.89, while Wesfarmers, owner of Coles, edged up 1¢ to $44.05.

The Australian Industry Group Australian Performance of Manufacturing Index edged down to 47.6 points in December, indicating the sector is contracting. According to the AIG PMI reading, food and beverage manufacturing was the only major subsector to expand in December - rising to 55.8 points. Bottler Coca-Cola Amatil gained 0.6 per cent to $12.10.

Healthcare was the worst-performing ­sector, down 0.3 per cent as Ramsay Healthcare dropped 1.6 per cent to $42.68 and CSL lost 0.2 per cent to $68.82.