China data boosts stocks

ROBUST economic data out of China helped boost resource stocks on the Australian bourse today with commodities surging on the news.


Figures released today showed the Chinese economy was still looking healthy. The consumer price index rose 4.4% in October from a year earlier, up from September's 3.6% rise.

Meanwhile, fixed asset investment in urban areas in the January-October period rose 24.4%, in line with expectations, while Chinese banks also extended CNY587.7 billion worth of new yuan loans in October.

The news helped lift Australian stocks with the S&P/ASX 200 index hitting an intraday high of 4740.1 before closing at 4728.6, up 0.6%, while the All Ordinaries gained 0.6% to 4810.3 points.

"It's not the most blindingly bullish set of data but it shows China's economy is still moving along at a fair clip," an unnamed analyst at an investment bank told Dow Jones Newswires.

The news out of China helped spark a surge in the price of metal on the London Metal Exchange with three-month copper hitting a new record high $US8945 per tonne today, up from last night’s close of $8760/t.

Meantime, the local market was also buoyed by news from the US where initial claims for jobless aid dropped by 24,000 to a seasonally adjusted 435,000.

However, the market experienced a short-lived sell-off after the Australian Bureau of Statistics reported a 0.3% increase in the October unemployment rate to 5.4%.

On the mining front and BHP Billiton gained A45c to close at $44.59, while Rio Tinto added $1.16 to close at $87.36.

Fortescue Metals Group gained 20c to $6.80, while OZ Minerals added 3.5c to $1.80.

There was much interest in Brockman Resources and Ferraus Australia today on news of the implied premium in Wah Nam International’s share offer for the two companies.

Wah Nam, an investment company, is offering 30 Wah Nam shares for every one Brockman share held, valuing Brockman at $A6.47 per share or $923 million.

The offer represents a 42.8% premium to Brockman’s closing price yesterday of $4.74 and a 61.5% premium to its 30-day volume-weighted average price.

Meanwhile, Wah Nam is offering six shares for every one FerrAus share held, valuing the company at $1.29 per share.

The proposed offer price is a 52.2% premium to FerrAus’ closing price of 86c yesterday and a 63.2% premium to its 30-day VWAP.

Brockman ended today’s session $1.23 higher at $5.97, while Ferraus gained 24c to $1.10.

Spot gold was trading 0.2% higher at $US1407.14 an ounce at 4:30pm AEDT.

Newcrest Mining gained A76c to $43.05, while Perseus Mining slipped 2c to $3.34 and Medusa Ming gained 24c to $6.52.