6:30 PM Sydney – Australian markets extended gains after advancing nearly 5% in January. The latest manufacturing data from China indicated slower than expected improvement.
Australian stocks extended gains led by resource sector after spot iron ore prices rose.
Market indexes opened soft but built more gains in the day and two surveys reported different perspectives on Chinese manufacturing sector.
China’s statistics bureau reported purchasing managers index increased in January to 50.4 and lower than 50.6 in December and below the nine-month high of 50.9.
Separately, HSBC survey also indicated manufacturing sector expanded to 52.3 in January, higher than the preliminary reading of 51.9 on higher domestic demand.
Two surveys do not move in tandem because of the different sampling methods. The official index has a larger representation from government controlled larger companies and HSBC has a higher number of privately owned smaller companies.
The ASX 200 index advanced 42.30 or 0.9% to 4,921.10 and the broader All Ordinaries increased 40.91 to 4,941.93.
The Australian dollar declined for the third day and closed at $1.039.
Yancoal up 0.5 cents to 90.5 cents and Fortescue Metals Group increased 11 cents to $4.79.
Newcrest Mining rose 23 cents to $23.63. Kingsgate up 2 cents to $4.05 and Whitehaven Coal fell 2 cents to $3.26.
Whitehaven Coal slid 2 cents to $3.26 after the coal miner estimated lower earnings on strong dollar, weak prices and train derailment disruptions.
Transfield Services gained 5 cents to $1.83 and engineering contractor WorleyParsons increased 10 cents to $25.33. Monadelphous Group advanced 22 cents to $26.86 and Downer EDI climbed 12 cents to $4.62.
Lend Lease added 19 cents to $10.55.
Oil Search Limited up 2 cents to $7.32 and Santos Limited slipped 6 cents to $11.90. Beach Energy fell 1 cent to $1.41. Karoon Gas Australia Ltd soared 3.4% and extended gains after it reported earlier that it found oil at its field off the coast of Brazil.
Woodside Petroleum gained 18 cents to $35.65 and Origin Energy Limited slid 14 cents to $12.50.
Linc Energy dropped 11% after it revised its production outlook.
Woolworths increased 17 cents to $31.41. Kathmandu jumped 8 cents or 4.5% to $1.85 and Wesfarmers added 20 cents to $37.80
Kathmandu jumped after the New Zealand based outdoors retailer raised first half profit outlook to an increase of 75% on same store sales increase of 6.1%.
David Jones Limited up 2 cents to $2.52 and Wesfarmers rose 20 cents to $37.80. Breville Group closed unchanged at $6.79.