Australian shares ended a three-day of losses and closed higher after a post-lunch turnaround, prompted by the announcement of an economic stimulus program by the Chinese central bank.
At the close of trade on Thursday, the benchmark S&P/ASX200 index was up 22.6 points, or 0.52 per cent, at 4,384.2, while the broader All Ordinaries index had risen 20.3 points, or 0.46 per cent, to 4,402.8.
On the ASX 24, the December share price index futures contract was 19 points higher at 4,386 with 26,741 contracts traded.
The market had been tracking about 0.6 per cent weaker during the day until news came out at about 1230 AEST that the People’s Bank of China would pump 365 billion yuan ($A55.9 billion) into money markets, to stimulate the economy.
Resources stocks with significant exposure to China led the turnaround with a lift in trading from 0.3 per cent in the red to a one per cent gain for the day.
IG Markets market strategist Stan Shamu said he thought it was also a good sign for Friday’s trading for the market to close at highs for the day.
A risk to that will be the release of the Spanish budget and banking review overnight, which must satisfy the European Central Bank before it agrees to buy Spanish bonds.
That could lead to volatility in trading, amid mass demonstrations in the debt-stricken nation with the government set to pass a tough budget with 39 billion euros ($A49 billion) in austerity measures.
The largest company on Australia’s stock market, BHP Billiton, closed 21 cents, or 0.64 per cent, higher at $33.02 after it had been 0.3 per cent weaker one hour before the close.
It represents more than one-fifth of resources stocks by market capitalisation and helped drag the market up.
Fellow resources stocks improved, including Rio Tinto, which lifted 70 cents to $53.59 and Fortescue Metals climbed one cent to $3.52.
The major banks were in also positive territory with Commonwealth Bank shares rising 46 cents to $55.83, NAB putting on one cent to $25.43, Westpac improving 28 cents to $24.80 and ANZ up 17 cents to $24.67.
Financial markets are also tipping the Reserve Bank of Australia would cut the cash rate next week, which currently stands at 3.5 per cent.
That was stopping equities sliding further, Macquarie Private Wealth division director Martin Lakos said.
Meanwhile, Woolworths shares dipped after it announced the sale of its Dick Smith Electronics chain to a private equity firm for $20 million.
Woolworths shares were 27 cents lower at $29.01.
Echo Entertainment shares closed higher after chief executive Larry Mullin quit, joining a management exodus.
It was four cents up at $3.79.
Preliminary national turnover was 1.7 billion securities worth $4.33 billion, with 447 stocks up, 446 down and 359 unchanged.
