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Australia, NZ shares log third weekly gain as China factory data lifts

Published 15/05/2020, 06:12 pm
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* Aussie miners advanced 3.3% for the week

* China April industrial output rises 3.9%

* NZ manufacturing activity falls to record low (Updates to close)

By Soumyajit Saha

May 15 (Reuters) - Australian shares closed firmer on Friday, led by mining stocks, as factory output data from the country's biggest trading partner China signalled robust domestic demand and gradual recovery from the coronavirus-led lockdown.

The S&P/ASX 200 index .AXJO closed 1.43% firmer in broad-based gains at 5,404.8 points. The benchmark ended the week 0.3% higher, marking its third weekly gain.

The metals and mining subindex .AXMM finished up nearly 4%, hitting a more than two-month high, supported by a jump in iron ore futures. Meanwhile, gold and copper prices also strengthened.

Iron ore prices benefited from data that showed industrial output in China, the world's top steel producer, rose at a faster-than-expected pace last month. Production at Chinese steel firms has picked up quickly since late March, boosted by a revival of downstream consumption. expansion, the first this year, came as the world's second-largest economy slowly emerges from its coronavirus lockdown, though consumption remained weak with retail sales falling 7.5% in April.

"While buying among miners is definitely the biggest driver today, there seems to be a real fracture of sentiment in the market as a lot of buying is happening among defensive utility and beaten-down financial stocks", CMC Markets' Chief Strategist Michael McCarthy said.

Index heavyweights BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX closed up 3.5% and 2.5%, respectively.

Gold XAU= rose 0.42% to $1,738.0, while Chinese iron ore futures DCIOcv1 on the Dalian Commodity Exchange climbed 3.4%.

Energy stocks .AXEJ advanced 1.9%, tracking overnight gains in oil prices after the International Energy Agency forecast lower global stockpiles in the second half of 2020. O/R

Brent crude LCOc1 futures rose 3.37%, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 2.61%.

Oil and gas explorers Santos STO.AX and Woodside Petroleum WPL.AX added 0.8% and 0.9% on Friday, respectively.

The energy subindex, however, fell 2.4% on the week as virus-led restrictions kept demand subdued and a supply glut weighed on prices.

Financial stocks .AXFJ also posted gains, with the "Big Four" banks rising between 1.2% and 2%.

The financial sub-index lost 1.2% for the week as top lender Commonwealth Bank of Australia CBA.AX joined its peers in flagging massive writedowns due to the pandemic earlier in the week.

New Zealand's benchmark S&P/NZX 50 index .NZ50 ended marginally lower, though the index rose 0.3% over the week.

A survey on Friday showed manufacturing activity in New Zealand fell to its lowest level ever recorded due to the economic impact of the coronavirus pandemic. providers Meridian Energy MEL.NZ and Contact Energy CEN.NZ fell 2.1% and 1.9%, respectively.

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