Encouraging signs for the housing sector have driven a rise in banking shares, which pushed the market to a fifth straight day of gains.
The release of China’s latest economic growth figure of 7.5 per cent – in line with expectations – also helped the major resources stocks improve from early lows.
“The financial space saw good buying, probably helped by another solid auction clearance rate in Sydney over the weekend,” IG chief market strategist Chris Weston said.
“Housing seems in a good space right now, especially after May home loan values have hit their highest level since 2009.”
Markets are also tipping a rate cut by the Reserve Bank of Australia in August, which would further boost the housing market, and China’s economic data did nothing to change that view, Mr Weston said.
Westpac was the best performing bank, up 25 cents to $29.36, while ANZ gained 23 cents to $28.95, Commonwealth Bank added 28 cents to $71.25 and NAB was nine cents higher at $30.03.
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Among other financial companies, Macquarie Group gained 42 cents to $45.16 and property owner Goodman Group added eight cents to $4.80.
In resources, BHP Billiton lost six cents to $33.25, up from its earlier low of $32.87, and Rio Tinto added three cents to $54.77, up from an earlier low of $54.22.
Smaller miners fared worse, with Fortescue Metals down four cents at $3.50, and gold miner Newcrest shed 46 cents to $11.63.
One of the worst performers was Treasury Wine Estates, after it said it would take a $160 million hit from measures it is taking to overcome a glut of stock in the United States.
Its shares lost 71 cents, or 12.2 per cent, to $5.11.
At the close on Monday the benchmark S&P/ASX200 index was up 7.2 points, or 0.14 per cent, at 4,981.1.
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The broader All Ordinaries index was up 8.1 points, or 0.16 per cent, at 4,965.6.
Earlier Tuesday, US stocks closed higher, edging to new all-time highs as in-line Chinese economic growth data offset disappointing US retail sales figures.
The Dow Jones Industrial Average on Monday rose 19.96 (0.13 per cent) to 15,484.26.
The broad-based S&P 500 added 2.31 (0.14 per cent) at 1,682.50.
It was the third straight session in which the Dow and S&P 500 closed at new all-time highs.
The tech-rich Nasdaq Composite Index picked up 7.41 (0.21 per cent) at 3,607.49.
David Levy, portfolio manager at Kenjol Capital Management, said Monday’s modest gains came on the heels of “mixed” economic news.
US retail sales rose just 0.4 per cent in June, below the 0.7 per cent expected by analysts. But China’s second-quarter gross domestic product growth came in at 7.5 per cent, in line with expectations and better than what some experts feared.
Levy said the market is still digesting last week’s gains. Early earnings results have been okay, but “it’s too early in earnings season to say a trend has been established”, he said.
Citigroup surged 2.0 per cent after reporting earnings of $US1.25 per share compared with analyst expectations of $US1.18. Revenues in securities trading and investment banking were particularly strong.
The Citi report, which followed strong earnings from peers JPMorgan Chase and Wells Fargo last week, helped fuel another rally in many banking shares. Wells Fargo rose 1.7 per cent, Goldman Sachs jumped 1.8 per cent and Morgan Stanley picked up 2.1 per cent.
Bond prices rose. The yield on the 10-year US Treasury bond fell to 2.56 per cent from 2.60 per cent late Friday, while the 30-year yield dropped to 3.61 per cent from 3.65 per cent. Bond prices and yields move inversely.
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