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The share market climbed for a second day as investors weighed upside surprises in Chinese factory output and retail sales against further evidence of a faltering property market.

The S&P/ASX 200 rallied 27 points or 0.36 per cent to its highest close in more than two months.  

Health, tech and consumer stocks led the advance. The major miners and banks finished mixed.

What moved the market

A rebound in Chinese industrial production and retail sales last month helped soothe concerns the economy was losing momentum. However, a downturn in the price of new homes underlined pressures on the property market.

Industrial output expanded a stronger-than-expected 3.5 per cent year-on-year, up from growth of 3.1 per cent in September. Retail sales also defied predictions of a slowdown, growing 4.9 per cent in October, up from 4.4 per cent the previous month.

“The latest economic data out of China is encouraging,” CommSec’s chief economist Craig James said. “The second largest global economy had been losing momentum since April and the latest data arrests that decline – at least for the latest month.”

A decline in new home prices muddied the outlook. Prices eased a quarter of a percentage point last month, the heaviest fall in six and a half years.

“The property sector slowdown is getting worse,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, told Reuters. He added this was “the key risk for the macro outlook in the next few quarters.”

Asian markets turned mixed after the lunchtime reports. China’s Shanghai Composite retreated 0.29 per cent. Hong Kong’s Hang Seng shed 0.08 per cent. The Asia Dow trimmed its advance to 0.47 per cent and Japan’s Nikkei to 0.4 per cent.

Today’s close left the ASX 200 on the brink of a breakout through technical resistance that has rebuffed previous assaults last month and last week. Strong leads tonight would  clear the way for a crack at the 7500 level for the first time in more than two months.

US futures opened higher this morning, but faded as the Asian session advanced. S&P 500 futures were lately up a point or 0.02 per cent after being up more than 0.1 per cent.

The US benchmark logged its first losing week in six last week despite a positive final session. The S&P 500 put on 0.72 per cent on Friday. The Nasdaq Composite gained 1 per cent as the tech giants outperformed.

Winners’ circle

Eight of eleven sectors advanced, led by healthcare, consumer discretionary and I.T. Energy, utilities and materials declined.

Incitec Pivot rose 3.85 per cent to a two-year high after a strong second half helped the explosives and fertiliser manufacturer almost double full-year net profit after tax to $359 million from $188 million in FY20. Earnings per share climbed 70 per cent to 18.5 cents per share.

Mesoblast jumped 11.76 per cent after an advanced trial showed its treatment for chronic heart failure helped reduce deaths, heart attacks and strokes. Rexlemestrocel-L was particularly effective in treating patients with high levels of inflammation, according to results from the Phase 3 trial.

Woodside Petroleum firmed 1.12 per cent on the sale of a 49 per cent stake in its Pluto Train 2 joint venture in WA. Global Infrastructure Partners will help fund the construction of a new LNG train and gas facilities at the Scarborough development.

Fortescue Metals climbed 1.21 per cent to a third straight gain as investors continued to support the iron ore miner’s pivot towards green energy. Rio Tinto faded 0.4 per cent and BHP 0.64 per cent.

Other heavyweight movers included Wesfarmers +1.45 per cent, Goodman +0.85 per cent, CSL +0.78 per cent and Westpac +0.62 per cent. ResMed added 5.16 per cent, Fisher & Paykel 3.56 per cent and Pro Medicus 3.6 per cent.

Doghouse

Most lenders declined as a rebound in long-term interest rates faltered. The yield on ten-year Australian government bonds dipped two basis points to 1.79 per cent. Yields rallied last week after inflation data in the US and China underlined pricing pressures.

NAB dropped 1.57 per cent as its shares traded ex-dividend. Also in retreat, CBA gave up 0.1 per cent and Afterpay 0.88 per cent.

Cimic said it expects to book $30 million after costs from the initial public offering of its jointly owned infrastructure services group, Ventia. The IPO values Ventia at approximately $1.45 billion. Cimic also expects a pre-tax gain of around $60 million. Shares in the construction firm eased 1.6 per cent.  

A 38 per cent increase in underlying earnings failed to keep Elders in positive territory. Shares in the agribusiness slid 0.74 per cent after reporting underlying profit increased by 40 per cent to $151.1 million. The company foresaw favourable seasonal conditions and high demand this half creating “excellent trading conditions”.  

Link Administration finished flat at $4.77 after announcing it will open its books on a non-exclusive basis to prospective suitor Carlyle Asia. The investment fund pitched a conditional, non-binding indicative offer valuing Link shares at around $5.38. Link received a separate offer last week for its banking and credit management business.

Other drags included Uniti Group -2.48 per cent, Ampol -2.08 per cent and Platinum Asset Management -2.02 per cent.

Other markets

Oil started the week on the back foot. Brent crude fell 67 US cents or 0.8 per cent to US$81.50 a barrel.

Gold faded US$7.20 or 0.4 per cent to US$1,861.30 an ounce following seven days of gains.

The dollar edged off one-month lows, rising 0.14 per cent to 73.42 US cents.

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