By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) —Australian shares closed firmly higher today to snap a three-session losing streak, after signs of strength in the global economy helped to revive risk appetite.
The benchmark S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.78% ended the day at 4267.80, while the Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD -0.3725% surged at one point to a level not seen since early September.
The Australian equity market performance tracked gains for European and U.S. shares yesterday where shares were boosted by the release of stronger global manufacturing data. Read more on U.S. Markets.
“Risky assets are reacting positively to resilient activity in China, signs of stabilization in Europe, and the ongoing recovery in the U.S.,” strategists at Barclays Capital said.
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In Australia, commodity-linked stocks were among the strongest performers as BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP +2.50% /zigman2/quotes/208108397/composite BHP +0.83% ended the day up 1.9%. The miner approved a $917 million pre-commitment for the construction of a 100 million metric tons a year iron ore export facility at Port Hedland.
Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO +2.46% /zigman2/quotes/202627887/composite RIO +0.72% jumped 2.9% and gold miner Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM +1.05% /zigman2/quotes/206026738/composite NCMGF -0.91% advanced 1.3%.
Shares in Lynas Corp. Ltd. /zigman2/quotes/202074955/delayed AU:LYC 0.00% soared 19.1% after the rare 1earths miner was granted a temporary license for a refinery in Malaysia.
In the energy sector, Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO -1.15% rose 2.6% and Beach Energy Ltd. /zigman2/quotes/200513631/delayed AU:BPT +0.71% /zigman2/quotes/209616278/composite BCHEY -3.59% put on 1.4%.
Alumina Ltd. /zigman2/quotes/210515632/delayed AU:AWC -0.34% advanced 1.6% and Bluescope Steel Ltd. /zigman2/quotes/201850153/delayed AU:BSL +1.77% added 1.2% after base metals prices rose overnight following the robust manufacturing reports.
A lift in U.S. construction spending helped building products maker James Hardie Industries SE /zigman2/quotes/201411224/delayed AU:JHX -0.84% /zigman2/quotes/200042563/composite JHX -0.60% with shares surging 4.2%. Boral Ltd. /zigman2/quotes/208897707/delayed AU:BLD -1.68% /zigman2/quotes/202320023/composite BOALY +0.36% traded 3.8% firmer.
Moves were more muted for the supermarket operators, with Wesfarmers Ltd. /zigman2/quotes/204567133/delayed AU:WES +0.98% /zigman2/quotes/201861689/composite WFAFY +0.63% ending the day up 0.6% after the conglomerate reported second-quarter sales at supermarket chain Coles rose 6.7% on the previous year, while sales at discount department store operators Target and Kmart fell during the period.
Rival Woolworths Ltd. /zigman2/quotes/209906204/delayed AU:WOW -0.39% WOLZY 0.00% ended down 0.4%. The firm reported a 5% rise in first-half sales earlier this week.
Peter Esho, chief market analyst at City index said Coles’ food and liquor comparable sales growth is more than three times that of its main rival in the second quarter.
“Coles continues to drive volumes and customers away from Woolworths,” Esho said. “The war in supermarkets between Coles and Woolworths is only likely to continue ramping up,” he added.
CSL Ltd. /zigman2/quotes/206911412/delayed AU:CSL +0.98% /zigman2/quotes/200723909/composite CMXHF +1.67% and Brambles Ltd. /zigman2/quotes/200985667/delayed AU:BXB -0.07% /zigman2/quotes/206869297/composite BMBLF +2.46% weren’t able to join in the broader market rally, with CSL shares ending the day down 1.3% and Brambles shares closing 1.8% lower.
Stan Shamu at IG Index noted that both firms were being hurt by the high Australian dollar and said: “the high Aussie dollar remains a talking point down under, after AUD/USD broke to a new high today.”
The Australian dollar jumped to a level not seen since early September Thursday, following the release of stronger-than-expected monthly trade data. Read more on Australian dollar move