ASX closes strong despite latest GDP data being lower than forecast

The Aussie share market has seen a promising close to Wednesday despite the latest GDP data showing weak economic growth.

The Aussie sharemarket has gained despite the slower than expected GDP data released on Wednesday.

The S&P/ASX200 gained 0.41 per cent, or 31.9 points, to 7,769, at the close on Wednesday, crossing above its 50-day moving average.While the broader All Ordinaries gained 0.35 per cent to 8022.2.

On the benchmark, eight of 11 industry sectors finished in the green, while miners and energy stocks dipped into the red off the back of weaker commodity prices.

The ASX closed Wednesday at a high. Picture: NCA NewsWire / Gaye Gerard

Sandfire Resources and Liontown Resources saw the greatest losses with 6.1 per cent and 5.8 per cent respectively.

Meanwhile, Xero also dropped by 4.8 per cent after announcing a block trade on Wednesday.

The top performing stocks at the close were Treasury Wine Estates Ltd and Seek Ltd, up 5.27 per cent and 5.25 per cent respectively.

Against the greenback, the Australian dollar remains steady, buying US65.56c at 4.30pm.

It comes as the Australia’s gross domestic product expanded by just 0.1 per cent in the March quarter, compared to the estimated 0.2 per cent rise forecast.

The latest data saw the cutting of annual growth to 1.1 per cent from 1.5 per cent in December, the Australian Bureau of Statistics said on Wednesday.

Saxo Head of FX Strategy Charu Chanana said the latest Australian GDP data print indicated there was still strong movement within the sharemarket.

“The muted reaction of the Australian dollar to Australia’s Q1 GDP miss is a signal that markets are not worried about the risk of an early rate cut from the RBA,” Ms Chanana said.

“The Australian dollar is likely to stay supported with gains in commodities and the recovery in China.”

Australia’s annual GDP growth to March expanded by 0.1 per cent. Picture: NewsWire / Nikki Short

RSM Australia Economist Devika Shivadekar said annual GDP growth to March showed the economy had weakened faster than the RBA expected, leaving many concerned about the whether the economy could sustain a further interest rate hike.

“The household savings ratio has fallen again after a recovery in the December quarter 2023, mainly dragged by much more modest compensation of employees and investment income received in the March quarter,” Ms Shivadekar said.

“Key drags on the economy are consumers who have all but entered hibernation until the outlook brightens.

“As we have noted previously, the RBA will choose to remain on hold at the June meeting and is unlikely to change stance until it has visibility on two more quarterly CPI datasets.

“This positions the November meeting as the one to watch.”

Meanwhile overseas on Wall Street, the Dow gain 0.4 per cent while Nasdaq also performed well adding 0.2 per cent at the closing bell.

Originally published as ASX closes strong despite latest GDP data being lower than forecast