Australian stocks have closed higher for a second straight day despite giving up early gains after a closer inspection of the latest economic growth figures.
At 1615 AEST on Wednesday, the benchmark S&P/ASX200 index had risen 11.6 points, or 0.29 per cent, to 4,055.3 points, while the broader All Ordinaries index was up 12.2 points, or 0.3 per cent, at 4,104.6 points.
On the ASX 24, the June share price index futures contract had climbed four points to 4,058 points, with 25,562 contracts traded.
Local stocks opened about 0.4 per cent higher, as investors took their cues from a positive night on offshore markets.
The market then reacted positively to figures which showed the domestic economy grew by a better-than-expected 1.3 per cent in the March quarter.
For the year to the March quarter, gross domestic product (GDP) rose 4.3 per cent, the Australian Bureau of Statistics said.
However, the stock market rally petered out during the afternoon as investors dug a bit deeper behind the headline numbers.
senior client adviser Michael Heffernan said while the GDP data looked okay on the surface, that was not necessarily a true indications of how the economy was travelling.
“There was a bit of ebullience after the national accounts figures came out, however closer analysis shows that the major reason why real GDP went up was because overall prices went down largely due to export prices falling,” Mr Heffernan said.
The best-performing sector on the day was gold, which rose 2.67 per cent, according to IRESS data.
Other big market sectors to post gains included metals and minerals stocks (up 0.54 per cent) and materials (up 0.44 per cent).
IG Markets strategist Stan Shamu said the growth numbers prompted a sharp rise in the Australian dollar, which capped gains in equity markets as industrials stocks struggled, falling 0.6 per cent.
Australia’s big four retail banks ended mixed, with the financial sector overall gaining 0.18 per cent.
While ANZ rose two cents to $21.34 and CBA advanced five cents to $50.05, NAB backpedalled 30 cents to $22.25 and Westpac was down 24 cents at $20.35.
None of the big four banks have announced their response to the Reserve Bank of Australia’s (RBA) 25 basis point easing in the cash rate.
Making news, Qantas Airways reached fresh lows as investors continued to react negatively to Tuesday’s shock profit downgrade.
The stock fell three cents, or 2.6 per cent to a new all-time low of $1.125, extending the 19 per cent decline on Tuesday.
The spot price of gold in Sydney $US1,624.40 per fine ounce, up $US7.98 from Tuesday’s local close of $US1,616.42 per ounce.
Preliminary national turnover was 1.5 billion securities worth $4.0 billion, with 549 stocks up, 390 down and 406 unchanged.
