The share market has shrugged off disappointing local trade deficit figures as it continues to rise on positive economic signs from China and strong leads from US markets.
US markets rose to record highs overnight and Chinese manufacturing data released on Tuesday showed factory activity in the world’s’s second biggest economy expanded at its fastest pace for 2014 so far.
These twin factors continued to drive the Australian share market despite Wednesday’s disappointing local trade deficit data, Commsec market analyst Steven Daghlian said.
Australia’s international trade balance has spent a second consecutive month in the red, following a fall in mining exports.
The deficit was $1.9 billion in May, compared to a $780 million deficit in April, Australian Bureau of Statistics figures show.
But, Mr Daghlian said, “Good news out of China is good news for investors”.
“The iron ore price was also a little higher, giving mining stocks even more of a boost.”
Rio Tinto was up 94 cents at $61.39, BHP Billiton was 64 cents higher at $36.64 and Fortescue Metals had gained 4.5 cents to $4.405.
Among the big four banks, Commonwealth Bank was up 67 cents to $80.64, Westpac had gained 27 cents to $33.65, ANZ had risen 31 cents to $31.15 and National Australia Bank was 38.5 cents higher at $32.685.
Meanwhile, shares in struggling food maker Goodman Fielder have fallen 2.5 cents to 65.5 cents on news it is poised to accept a lower takeover offer from two Asian companies.
The Hong Kong-based investment firm First Pacific and Singapore agribusiness Wilmar International have agreed to buy the breads-and-spreads maker for $1.34 billion, or 67.5 cents a share.
The offer is 2.5 cents a share lower than their previous offer made in May, which valued Goodman Fielder at $1.37 billion.
Wesfarmers continues to perform strongly despite announcing that it’s facing a $774 million hit to its bottom line from its struggling Target chain and the restructure of its liquor business.
The conglomerate’s share price was up 62 cents at $42.14.
In other news, Singapore property group Frasers Centrepoint appears set to snare Australand in a $2.6 billion deal.
Australand shares were four cents higher at $4.48.
KEY FACTS
* At 1200 AEST on Wednesday, the benchmark S&P/ASX200 index was up 54 points, or one per cent, to 5,429.9.
* The broader All Ordinaries index was up 51.9 points, or 0.97 per cent, to 5,418.4.
* The September share price index futures contract was 52 points higher at 5,392, with 16,564 contracts traded.
* National turnover was 613.9 million securities worth $1.42 billion.
