Interpac Business and Migration Solutions Melbourne Australia

(July.13)

Australian shares are trading higher, buoyed by a rise in commodity prices overnight and after the release of better than expected Chinese GDP data.

In early trade, the benchmark S&P/ASX200 index was up 11.9 points, or 0.3 per cent, at 4507.3, while the broader All Ordinaries index was up 11.4 points, or 0.25 per cent, at 4574.9.

Immediately after midday, local shares gained further ground following the strong Chinese data.

Australian stock report head of research Geoff Saffer said overseas leads had initially affected local stocks.

‘‘Then we did see an initial reaction to the Chinese data,’’ Mr Saffer said.

China’s rapid economic growth slowed slightly in the latest quarter as the government hiked interest rates and tried to cool surging inflation, but the slowdown wasn't as big as investors had feared.

Chinese GDP came in at 9.5 per cent, and had been expected to rise 9.4 per cent, while steel output rose 11.9 per cent.

‘‘As a result, the Australian miners responded well to the data,’’ Mr Saffer said.

The strength in the local market defied negative leads from Europe and the US.

Locally, the major banks rebounded after a weak morning. National Australia Bank gained 8 cents to $23.96, ANZ added 7 cents to $21.15, Commonwealth Bank rose by 1 cent to $49.65 and Westpac was 10 cents higher at $21.24.

Gold miner Newcrest was up 59 cents to $39.30 on the back of a rise in the gold price.

The major resource stocks were mixed, with BHP Billiton adding 14 cents to $43.60 and Rio Tinto down 80 cents to $80.93.

In company news, agricultural chemicals supplier Nufarm said it will report underlying operating profit of $67 million to $73 million when it releases its full year results. Nufarm shares were 1 cent higher at $4.49.

Rare earths supplier Lynas’s Malaysian subsidiary will spend up to $US210 million on the second phase of construction on a planned refinery plant in Kuantan. Lynas shares were 2 cents higher at $1.96.

A 1 per cent bounce in commodity prices was enough to push the market into positive territory at the start, despite the global gloom.

There was also a whiff of optimism around the resources sector inspired by the $US5 billion bid for Macarthur Coal.

Base metal prices all rose overnight, as did oil and gold, which gave a boost to resources stocks.

However, a surprisingly big drop in consumer confidence to a two-year low weighed on sentiment and shares trimmed gains after the announcement.