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Finance
Derek Rose

Miners keep ASX in the green as China unveils stimulus

The materials sector rose 2.7 per cent, more than offsetting a lacklustre day for the big banks. (Steven Saphore/AAP PHOTOS)

The local bourse has gained ground, with the mining sector enjoying its best day in four months as China unveiled new stimulus measures to prop up its ailing economy.

The benchmark S&P/ASX200 index closed up 33.3 points, or 0.46 per cent, to 7,339.7, while the broader All Ordinaries gained 37.4 points, or 0.5 per cent, to 7,554.7 on Tuesday.

The gains came after China's Politburo announced new measures to boost demand, including new steps to support its troubled property sector.

"While it signalled more support for the economy, the Politburo meeting generally fell short of offering large-scale stimulus," Barclays economists said in a note.

Still the mining sector rose 2.7 per cent, its best day since a 2.9 per cent rise on March 2, with BHP alone responsible for two-thirds of the ASX200's jump.

The multinational rose 3.3 per cent to $45.82, while Fortescue Metals added 4.6 per cent to a six-month high of $23.20 and Rio Tinto advanced 3.4 per cent to $119.18 ahead of its full-year earnings report late Wednesday afternoon. 

Newcrest edged 0.1 per cent higher at $26.50 after Australia's biggest goldminer released a weak fourth-quarter production report.

Lithium miners rebounded after Pilbara Minerals posted a strong June quarter, announcing a $656 million increase in cash to $3.3 billion despite volatile prices.

"We were an early mover and that was tough, but that has now flipped into the most incredible opportunity," managing director Dale Henderson told investors.

Pilbara shares rose 5.2 per cent to $4.83, while Mineral Resources climbed 3.9 per cent to $70.95 and Allkem added 2.3 per cent to $15.40 after receiving $US130m in financing for a new lithium mine in Argentina. 

Energy companies also enjoyed a solid performance as Brent crude rose to a three-month high of $US82 a barrel amid the Chinese stimulus measures and decreased production from Russia.

Woodside added 1.2 per cent to $37.70, Ampol gained 1.0 per cent to a 10-month high of $33.23 and coalminer New Hope advanced 2.4 per cent to a six-week high of $5.52.

In the heavyweight financial sector, all the Big Four banks were lower.

Westpac dropped 1.1 per cent to $21.73, NAB fell 0.3 per cent to $27.61 and both ANZ and CBA dipped 0.2 per cent, to $25.06 and $104.20.

The consumer discretionary sector was the worst performing, falling 0.8 per cent ahead of Wednesday's closely watched release of second-quarter inflation data that will be crucial in deciding whether the Reserve Bank raises rates next Tuesday.

Domino's Pizza Enterprises fell 5.0 per cent to $47.29, while Wesfarmers retreated 0.9 per cent to $48.82 and Super Retail Group subtracted 1.2 per cent to $11.90. 

Elsewhere, Monadelphous Group climbed 5.4 per cent to a more than two-month high of $13.17 after the engineering company secured a $200 million contract with US lithium giant Albermarle for work at its Kemerton lithium hydroxide plant in WA.

The Australian dollar was buying 67.68 US cents, from 67.38 US cents at Monday's ASX close.

ON THE ASX:

* The S&P/ASX200 index finished Tuesday up 33.3 points, or 0.46 per cent, at 7,339.7.

* The All Ordinaries added 37.4 points, or 0.5 per cent, to 7,554.7.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.68 US cents, from 67.38 US cents at Monday's ASX close

* 95.75 Japanese yen, from 95.25 Japanese yen

* 61.11 Euro cents, from 60.47 Euro cents

* 52.72 British pence, from 52.30 pence

* 108.89 NZ cents, from 108.87 NZ cents.

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