Shares pushed higher on Tuesday as investors digested a first slew of earnings reports and a surge in iron ore futures provided solid buying support for resource stocks.
Utilities, real estate and energy shares were the best performing sectors, while technology shares were a drag on the bourse.
The benchmark S&P;/ASX 200 index closed up 0.9 per cent to 5772 points and the broader All Ordinaries Index lifted 0.8 per cent to 5820 points.
"Last month was the reflation trade whereas now we're seeing a lot of sector rotation," said James Gerrish, senior investment adviser at Shaw & Partners.
"There hasn't been much aggregate buying, so no real new money coming in, but that could be because of the higher currency. Overall the start of reporting season looks positive though, given the market closed up."
iSentia shocked investors with a profit downgrade and revealed the shutdown of King Content, a media monitoring and content company it bought for $48 million two years ago. The stock dropped a hefty 20.7 per cent to close at $1.76.
Treasury Wine Estates jumped 4.8 per cent higher after the wine supplier reaffirmed its earnings guidance for the second half of the 2017 financial year. Investors seemed pleased enough and shook off a recent downgrade by Goldman Sachs to a "sell" rating, claiming the Asian expansion plans are unrealistic.
Listed waste management firms Bingo Industries and Cleanaway are trading down amid speculation that next week's Four Corners investigation into questionable practices within the industry might cast a shadow over the sector.
There's no suggestion that either company is involved in anything untoward, but Bingo closed down 8.4 per cent and Cleanaway was down 3.1 per cent today after last night's Four Corners included a preview of next week's story.
There was broadbased buying in resource companies, thanks to a spike in iron ore futures.
BHP Billiton continued its recent rally to add another 1.2 per cent, Rio Tinto gained 0.2 per cent and Fortescue leapt 1.4 per cent.
The big four banks all closed between 0.4 and 0.9 per cent higher, while Telstra investors enjoyed a rare 1 per cent jump in the share price.
Stock Watch: Freelancer
Shares in Freelancer plummeted 24 per cent on Tuesday after a disappointing half-year result, released after the market closed on Monday. The stock ended at 50¢ after trading as low as 47¢, taking its losses in 2017 to 50 per cent. Freelancer offers a freelancing and crowd-sourcing marketplace, connecting employers with freelancers globally from nearly 250 countries, regions and territories. Revenue for the group remained flat, compared to the prior corresponding period. While revenue from the online marketplace division grew 6 per cent to $23.1 million, revenue from online payment services (part of its Escrow.com acquisition) declined nearly 28 per cent to $3.1 million. Two analysts rate the stock a 'buy', one a 'hold' and one a 'sell', with an average price target of $1.06.
Market movers
Copper and nickel
The price of copper hit a two-year peak on Tuesday on upbeat manufacturing data in top consumer China, while nickel hit a near four-month high on renewed supply worries and soaring steel prices. Growth in China's manufacturing sector cooled slightly in July, as foreign demand for Chinese goods slackened, but a government-led drive to develop infrastructure boosted growth in the construction sector.. The data, combined with an environmental crackdown in China, sent Chinese steel prices to their highest since December 2013. Nickel is mainly used in stainless steel-making.
Big banks
The worst seems over for the big banks following their abysmal May and June, and UBS expects the rally to continue, at least for a bit. Most importantly, APRA's light-touch definition of 'unquestionably strong' capital even took the bankers by surprise, said analyst Jonathan Mott. "Multiples are off their highs and money is likely to flow into the banks as investors trim underweight positions and avoid US dollar plays into reporting season. That said, the medium term outlook is clearly challenging which caps the upside potential," he said pointing to over-leveraged consumers and possible further macroprudential tightening.
Chinese manufacturing
China's unofficial manufacturing gauge suggests that manufacturing activity has held up better than previously thought and points to a pick-up in economic growth last month, Capital Economics says. In contrast to Monda"s the official manufacturing PMI, which declined last month from 51.7 to 51.4, the Caixin manufacturing PMI picked up, from 50.4 to 51.1, outperforming expectations of 50.4. The breakdown suggests that stronger foreign demand helped drive a pick-up in new orders (the official PMI had showed he opposite), Capital Economics' Julian Evans-Pritchard said.
Bond bubbles
Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That's where the actual bubble is, and when it pops, it'll be bad for everyone. "By any measure, real long-term interest rates are much too low and therefore unsustainable," the former Federal Reserve chairman said in a Bloomberg interview. "When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace."
