Chinese second quarter GDP was released this afternoon. Posting a result of 7.5%, it shows the country is still expanding, just beating expectations of 7.4%.
While trading on the ASX has been relatively flat, the S&P 200 was trading down 0.2%, most of the country’s mining stocks are up.
Strong Chinese data means demand for Australia’s resources, including iron ore, coal, copper and nickel should continue for the time being.
Leading the charge, Australia’s exploration darlings Sirius Resources was up 17.15% at $4.03 a share short time ago after releasing the findings from its definitive feasibility study on the Nova nickel deposit in Western Australia.
The study, which says the project is a “goer”, expects the mine will have a 10 year life and should be built for $473 million. The miner expects its mining lease will be granted in August, subject to a native title agreement.
With mining investment tapering off there are just a few new mining projects being built. This means investors will be watching Sirius closely.
Overnight the iron ore price for September 62% Fe Swap Futures was $98.38, down 20 cents.
Iron ore miner Fortescue Metals Group is also up 3.36% at $4.46 a share after releasing its June quarterly production report this morning. Fortescue produced 43.8 million tonnes of iron ore over the quarter, up from 29.6 million tonnes mined in the March quarter. It shipped 38.7 million tonnes in the three months to June, also up from 31.5 million tonnes posted in the March period.
But the June results weren’t enough for Fortescue to hit its shipment guidance. Over the financial year the company shipped 124.2 million tonnes, missing its shipment target of 127 million tonnes by 2%.
Fellow iron ore miner Atlas Iron was also up 2.03% at $0.60 a share after announcing its Mount Webber mine in Western Australia’s Pilbara region has been officially opened. Production will start at a rate of 3 million tonnes per year and is expected to ramp up to 6 million tonnes a year by the end of the December quarter.
Mining majors BHP Billiton and Rio Tinto were also trading slightly higher, up 0.21% and 0.98 % respectively.
Investors will today also be watching banking stocks to determine if “defensive action” is needed after the release of the Interim Financial Services Report and FoFA changes announced on Tuesday, CMC Markets chief market analyst Ric Spooner said.
“Investors will be conscious of the fact that there is a long way to go and many trade-offs to be considered between now and the actual implementation of policy changes. However the potential for increased capital requirements to support housing loans and the possibility of indicatives to further reduce revenues from managing superannuation funds loom as possible negatives for the banks,” he said.
After some of Qantas’ ownership restrictions were lifted overnight, shares in the airline have fallen 1.03% to $1.25. The structure changes weren’t as big as the airline was hoping for. There’s more on that here.