Australian shares rose on Wednesday after global miner BHP reported record iron ore output for 2017/18, which sent its shares up over three per cent in a boost to peers and overall sentiment.
The benchmark S&P/ASX200 index closed up 41.5 points, or 0.67 per cent, at 6,245.1 points, while the broader All Ordinaries gained 40.7 points, or 0.65 per cent, to 6,329.1 points.
Wall Street's positive overnight lead also helped gains.
BHP, the world's biggest miner, said its iron oreoutput rose three per cent during the three months through June, topping forecasts, and set its fiscal 2019 production target slightly higher.
BHP's shares rose 3.3 per cent to a near nine-month high on the news, and pulled up the mining index 1.4 per cent.
Even an expected $650 million charge to 2017/18 results to cover the failure of the Samarco Dam in Brazil did not dampen investor sentiment.
"Everyone knew there was a charge coming; that was probably towards the lower end of the worst-case scenario. I think the hit they have taken is at the lesser end of the scale," said Christopher Conway, head of research and trading at Australian Stock Report.
Positive BHP sentiment cascaded to its peers, with Rio Tinto and South32 Ltd up 0.4 per cent and 0.9 per cent, respectively.
On the other hand, energy stocks extended their declines as oil prices dropped after an industry group reported that US crude inventories rose last week, defying analyst expectations for a significant reduction.
The energy index, fell for a sixth straight session, closing 0.6 per cent lower on Wednesday.
In companies news, education provider Navitas slipped 3.3 per cent to $4.09 after flagging the closure or sale of its Australian health care and community services training business and the closure of some US colleges in a restructure that will cost it $130 million.
New Zealand-based, China-focused dairy producer Keytone Dairy gained 16 cents, or 80 per cent, on its 20 cent issue price in its debut on the ASX to close its first day of trading at 36 cents.
The gold index also fell for a fourth consecutive session, as gold prices hovered near one-year lows, after upbeat testimony to Congress from Federal Reserve Chairman Jerome Powell on the US economy buoyed the US dollar.
The Australian dollar slipped to 73.5 US cents, from 74.31 US cents on Tuesday, as the prospect of more rate hikes in the US drew investors to the greenback.
ON THE ASX
* The benchmark S&P/ASX 200 index closed up 41.5 points, or 0.7 per cent, at 6,245.1 points
* The broader All Ordinaries index was up 40.7 points, or 0.7 per cent, at 6,329.1 points
* The SPI200 futures contract was up 36 points, or 0.6 per cent, at 6,194 points at 1630 AEST
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 73.50 US cents, from 74.31 US cents on Tuesday
* 83.11 Japanese yen, from 83.498
* 63.20 euro cents, from 63.32
* 56.15 British pence, from 56.05
* 108.88 NZ cents, from 108.86
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,224.19 per fine ounce, from $US1,242.87 per fine ounce on Tuesday.
The S&P 500 hit a five-month high on Wednesday as solid earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.
As earnings season ramps up, analyst optimism has grown; S&P 500 earnings are now seen to have increased 21.4 percent in the quarter ended June 30, up from 20.7 percent on July 1. Of the 48 companies in the index that have reported so far, 87.5 percent posted earnings above analyst expectations.
“Earnings are keeping the market up,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York. “Nobody’s going to sell their stocks ahead of seeing what happens here with earnings.”
Investors also looked to U.S. Federal Reserve Chairman Jerome Powell’s testimony before a House of Representatives committee, as he faced new questions on trade policy risks the day after expressing confidence in the strength of the U.S. economy.
The U.S. housing market continues to be an economic soft spot. A report showed housing starts fell 12.3 percent in June to a nine-month low as homebuilders struggle with higher lumber prices and ongoing land and labor shortages.
The Dow Jones Industrial Average .DJI rose 73.91 points, or 0.29 percent, to 25,193.8, the S&P 500 .SPX gained 5.19 points, or 0.18 percent, to 2,814.74 and the Nasdaq Composite .IXIC added 1.07 points, or 0.01 percent, to 7,856.18.
Online retailer Amazon.com (AMZN.O) became the second company after Apple (AAPL.O) to reach $900 billion in market value, a major milestone in its 21-year history as a publicly listed company.
Berkshire Hathaway (BRKb.N) led the financial sector higher, rising 4.5 percent on news that the company eliminated a restriction on its ability to buy back its own stock.
S&P 500 industrials .SPLRCI were up 1.1 percent following strong earnings from railroad CSX Corp (CSX.O) and United Continental (UAL.N).
The Dow Jones Transport Average .DJT jumped 2.2 percent, on pace for its biggest daily advance in three months.
Shares of Google parent Alphabet (GOOGL.O) edged higher after earlier losses after EU antitrust regulators hit the tech company with a record $5 billion fine.
Advancing issues outnumbered declining ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and no new lows; the Nasdaq Composite recorded 86 new highs and 42 new lows.
Source: Netwealth Morning Business Roundup
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