Australian stocks close higher amid optimism about Chinese support measures – September 22, 2023 at 09:01

Australian shares broke a four-session decline on Friday, supported by commodities and financial stocks, as hopes for stimulus measures from China, the country’s largest trading partner, boosted local investor sentiment.

The S&P/ASX 200 index ended 0.1% higher at 7,068.80 points. Over the course of the week, the main index fell by 2.9%.

Reports from local Chinese media about the supportive measures the country has taken to boost the development of its own economy have boosted investor sentiment.

“China would never jeopardize the long-term contracts or supply chains it has with Australia, and I think commodities will do very well,” said Brad Smalling, managing director of Smalling Stockbroking.

“The ASX will do very well through the end of the year, and a lot of that will be down to commodities, which will flow into our surpluses.

Australia recorded its first surplus in 15 years for the year ending June 2023, thanks to strong employment growth and bumper mining profits.

Investors are now turning their attention to August inflation and retail sales data, due next week, which will determine the path of the Reserve Bank of Australia (RBA) interest rate increase.

In Sydney, energy stocks rose 0.7% as oil pressures increased due to concerns about global supplies. Over the course of the week, the sub-index showed a decrease of 4.1%.

Woodside Energy rose 0.6% and Santos rose 0.7%.

Mining company shares rose 0.7% after three consecutive sessions of decline as iron ore prices rose amid optimism about business support measures in China.

Rio Tinto shares fell 1.2% after it announced that it would stop work at a mining site in the Pilbara region.

Banking stocks also rose 0.2%, with Westpac

Separately, horticulture company Costa Group rose 6.6% after accepting a takeover bid worth A$1.50 billion (US$962.6 million) from a consortium led by US private equity firm Bain Schwartz Partners.

In New Zealand, the S&P/NZX 50 index rose 0.5% to close at 11,372.62 points.