By Lucy Battersby and David Scutt
A bad start and sagging bank stocks were not enough to prevent the Australian securities market finishing higher on Friday.
The session started with renewed pessimism about the trade relationship between the United States and China, but the mood improved when China released data later in the day showing its manufacturing sector grew in October at the fastest pace since early 2017.
The Caixin-IHS Markit China manufacturing purchasing managers index (PMI) rose 0.3 points to 51.7 after adjusting for seasonal patterns, boosted by a surge in new orders from both home and abroad. This increase was the fastest pace since January 2013, according to survey respondents.
"Companies commented on firmer underlying market conditions and improved client demand both at home and abroad. Notably, new export business increased for the first time in five months, albeit marginally," IHS Markit said in its monthly update.
The IHS-Markit PMI tends to focus on small and medium-sized firms from China’s private sector. While smaller in scope to the government’s PMI which reported that activity levels fell at a faster pace over the same period, financial markets tend to pay more attention to Friday’s release.
"Historically, the Caixin index has been the more reliable guide to cyclical fluctuations in China’s economy," Capital Economics’ senior China economist Julian Evans-Pritchard told clients.
"It therefore seems most likely that growth continued to pick up last month, but the picture is unusually murky."
Macquarie Group's chief executive, Shemara Wikramanayake, has increased dividends to $2.50. Credit: Ryan Stuart
Macquaire Bank, CSR, and Orica all reported results that initially saw their stock price fall before recovering in the afternoon to close higher. Macquarie Group reported an 11 per cent gain in profits and higher dividends of $2.50 per share. The stock price dropped by as much as $3 to $130.91 during trading but recovered in the afternoon to close 46¢ higher at $134.38.
Orica shares rose, then dipped, then rose again as investors digested news the company returned to a $245 million profit following last year's loss. The shares closed a healthy 3.6 per cent higher at $23.73, the best closing price since March 2014.
On the Australian index, the banking sector dragged away 16.6 points from the market due to a 2.1 per cent fall in ANZ shares to a two-month low of $26.19. But the health care sector really took care of the index, which closed 5.7 points higher at 6669.1, a gain of 0.1 per cent. CSL reached fresh all time highs of $258.98 during the day and provided enough points for the S&P/ASX 200 to close higher.
The biggest gain on the market on Friday was New Hope Coal, up 6.6 per cent to $2.27, after it received a judgment in its favour to proceed with a coal mine in Queensland.
Pilbara Mines was up 6 per cent to 35¢, and PolyNovo gained 4.4 per cent to $2.36. Sims Metal Management closed higher for the first time in five sessions, starting the day at $9.30 and closing at $9.76. It released a profit warning on Monday that saw shares fall 8.8 per cent in one day. Bega Cheese has also started rising again after three sessions of declines following Tuesday's profit warning.