Australia shares post biggest one-day rise in 3 wks, Wall St & China CPI buoy

Tue Apr 9, 2013 2:56am EDT

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SYDNEY, April 9 (Reuters) - Australian shares jumped 1.5 percent in their biggest single-day rise in three weeks on Tuesday, led by miners and financials after Wall Street stocks gained overnight and data from China showed inflation had eased.

China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent, leaving policymakers room to keep monetary conditions loose to support a nascent economic recovery.

"Confidence is returning to our markets, today has been a refreshing change after a month of selling following the lower than expected Chinese inflation figures," said Ben Taylor, sales trader at CMC Markets.

The S&P/ASX 200 index climbed 71.3 points, or 1.5 percent, to finish at 4,976.8, marking the biggest one-day percentage gain since March 15. The benchmark rose 0.3 percent on Monday, snapping three sessions of losses.

Besides the China CPI data, the mood was also helped by U.S. stocks ending higher on Monday as investors looked ahead to an earnings season expected to show modest growth despite concerns about the economy's health.

Financials underpinned the market, with Westpac Banking Corp climbing 2.6 percent, and National Australia Bank up 2.7 percent.

Global iron ore miners also supported index, with BHP Billiton Ltd adding 1.4 percent while rival Rio Tinto Ltd jumped 3.5 percent. World no.4 iron ore miner Fortescue Metals Group surged 7.3 percent.

Shanghai steel futures rose for a third straight session on Tuesday amid signs that demand in top consumer China is picking up, lifting iron ore prices to near one-month highs as mills stocked up on the raw material.

Some traders say the extra liquidity released into global financial system through the quantitative easing policies pursued by the U.S. Federal Reserve and the Bank of Japan were also likely underpinning equities. The BOJ last week unveiled a sweeping monetary expansion campaign that aims to inject $1.4 trillion into the economy to revive growth and whip deflation.

"Perhaps the market is seeing the $165 billion a month of Federal Reserve and Bank of Japan liquidity as a signal to get back in," said Chris Weston, chief market strategist at IG Markets.

"Perhaps it was the valuations or even the Chinese CPI number that gave them the extra confidence after a good open."

Energy and gas explorers Woodside Petroleum Ltd and Oil Search climbed 2.2 percent and 1 percent respectively.

Alumina jumped 5 percent on the back of a higher-than-expected quarterly profit from Alcoa. Alumina owns 40 percent of Alcoa World Alumina & Chemicals in a joint venture with Alcoa.

Ten Network Holdings soared 6.8 percent after the struggling TV broadcaster posted a A$243 million first half loss, but its CEO Hamish McLennan said the company had addressed performance issues including a A$230 million capital raising and a reduction of net debt by A$262 million to A$1.2 million. Shares in Ten have nearly halved in value over the past year.

On the losing ledger, shares in Australian resource firm Sundance Resources plunged 47.6 percent after it terminated a $1.4 billion takeover by private Chinese firm Hanlong Group, threatening prospects for its key asset, a large iron ore project in Africa.

New Zealand's benchmark NZX 50 index finished the session 2 points lower at 4,395.2. (Reporting by Thuy Ong, additional reporting by Jim Regan; Editing by Shri Navaratnam)

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