A trade surplus that beat expectations and reports that Australia’s largest trading partner China is working on new stimulus measures pushed stocks higher.
Australia’s benchmark S&P/ASX 200 surged to 5409.9 after adding 6.6 points or 0.1% on Thursday. The All Ordinaries Index, which is a broader measure, jumped 0.1% to hit 5415.7.
Domestic stocks also took cue from developments in Wall Street, where the US S&P 500 closed at a record peak.
Data from the Australian Bureau of Statistics showed improvement in the rate of retail sale growth for the fourth consecutive month, which advanced 0.2% in February on a seasonally adjusted basis. Sales in household commodities took the front seat as per the latest data.
However, the results slightly fell short of consensus projections of a 0.3% surge.
While the latest results are softer than anticipated, chief economist Kieran Davies of Barclays bank Australia said that there is no cause for alarm, considering the fact that January had witnessed a 1.2% spike.
“The wealth effect [from an extended period of low interest rates] is providing a further boost to spending. Although wages and employment are still weak, house prices continue to grow strongly, up 12 per cent over the past year, providing a major boost to household wealth and this is supporting spending,” Davies is quoted by the Sydney Morning Herald as saying.
Australia’s trade balance saw an excess of $1.2 billion in February, which is significantly beyond median forecasts of $800 million in surplus, as shown by another set of data by ABS.
But the Australian stock market was somewhat consolidated in mixed trading today, as investors stayed away from participation after the end of the first quarter, according to Wall Street Journal.
Fortescue Metals dropped 1.3% after the price of iron-ore for immediate delivery fell 2%. The National Australia Bank lost 0.5% while BHP Billiton jumped 0.4%.
To contact the reporter of the story; Jonathan Millet at firstname.lastname@example.org