Australian shares rallied for a second day as Asian markets and US futures proved resilient to soft Chinese factory data and increasing tensions between Russia and Ukraine.
At lunchtime the ASX 200 was trading eight points or 0.15% ahead at 5634 as the market delivered steady gains across all sectors. Property trusts +1.1% was the best of the sectors, ahead of gold +0.8%, metals & mining +0.6%, industrials +0.6% and telecoms +0.6%.
The market pared its advance after the 11am release of data confirming that China's official gauge of factory activity deteriorated broadly in line with expectations last month. The China Federation of Logistics and Purchasing manufacturing Purchasing Managers Index dropped to 51.1 from 51.7 in July. Economists surveyed by Dow Jones had predicted a reading of 51. The final version of HSBC's rival measure dipped to 50.2 last month from a preliminary reading of 50.3 and a July figure of 51.7.
"The notable drop in the PMI shows that the current economic situation faces some downward pressure," CFLP analyst Zhang Liqun told MarketWatch.
The dollar took the data in its stride, edging up to 93.4 US cents. China's Shanghai Composite gained 0.31%, Hong Kong's Hang Seng 0.08% and Japan's Nikkei 0.38%. Dow futures were recently up five points or less than 0.1%.
Back hone, manufacturing conditions deteriorated last month, according to AIG's Performance of Manufacturing Index. The PMI fell 3.4 points to a seasonally-adjusted 47.3 with production, sales, new orders and employment declining.
Other data showed house prices increased by 4.2% over the three months to August, consumer prices were flat during August and a drop in commodity prices knocked company gross operating profits down 6.9% over the June quarter.
Crude oil futures eased 19 cents this morning to US$95.77 a barrel. Spot gold was 40 cents weaker at US$1,286.80 an ounce.
Positive signals from Asia, the US and commodity markets. If there was genuine concern about war in Ukraine, gold and oil should be rising. The Chinese manufacturing reports were more or less as expected and therefore had minimal impact. That said, well done if you made decent cash this morning. Can't say I was overwhelmed by opportunities. Got some beer money out of OBJ and had small first dabs at CXZ and AXC as short-term trades rather than intraday.
