The sharemarket rose yesterday after US housing data suggested economic growth in the world's biggest economy was likely to continue, and above-consensus GDP data from China showed that an economic recovery in Australia's biggest trading partner was on track.
Rio Tinto rose 2.7 per cent as investors welcomed news that iron ore divisional head Sam Walsh was replacing Tom Albanese as chief executive. His appointment accompanied massive writedowns by the miner.
BHP Billiton gained 0.4 per cent, helped by firmer copper, oil and gold prices, and Fortescue Metals jumped 3.2 per cent after iron ore prices stabilised.
Wesfarmers fell 1.7 per cent after JPMorgan downgraded it to underweight.
Banks were mostly flat, although National Australia Bank rose 1.2 per cent.
The benchmark S&P/ASX 200 closed up 0.3 per cent at 4771.2 points, racking up its third consecutive daily rise, after hitting a 20-month high of 4787.2 on Thursday. The index rose 1.3 per cent for the week, its biggest weekly rise in the past seven weeks.
"We could have a pop to 5000 next month if the China data continue to improve," RBS Morgans investment adviser Christopher Macdonald said. "You've got this worldwide growth scenario with cheap money and record money supply forcing these equities up. Late-stage investors are questioning why they have so much cash in the bank."
China's December quarter GDP rose 7.9 per cent over the year, up from 7.4 per cent in the September quarter, and stronger than market expectations of a 7.8 per cent rise.
The figures suggest Chinese growth is likely to stabilise at about 8 per cent this year, lower than the double-digit rates that it has achieved for much of the past three decades, but still a robust pace of expansion that will help support the global economy.
The Australian dollar was higher late in local trade on the good news for China. At the close it was trading at $US1.0523, up US0.13c.
"The upswing in Australia's biggest trading partner, along with calmer global financial markets, allows the Reserve Bank of Australia to sit comfortably for at least the next month or so," said Annette Beacher, head of Asia-Pacific research at TD Securities.
The dollar initially sold off after the data, as a strong buildup of long positions -- bets that the local currency would rise -- and recent gains probably led to some profit-taking.
London Metal Exchange copper climbed 1.3 per cent, spot gold gained 0.5 per cent and Nymex crude oil jumped 1.3 per cent after US housing finance approvals for December jumped 12.1 per cent to 954,000, exceeding market expectations of 890,000 approvals. US weekly initial jobless claims hit a five-year low of 335,000.
"If we can get continued improvement in US housing and consumer spending, you've got the perfect conditions for US economic growth," Mr Macdonald said.
