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A third day of gains lifted the ASX to its highest close in three weeks, powered by the banking and mining juggernauts.

The S&P/ASX 200 trimmed its advance after a mid-session report showed the Chinese economy and factory output slowed faster than expected. The index finished 19 points or 0.26 per cent ahead after being up as much as 32 points.

Rio Tinto, Commonwealth Bank and ANZ set the pace. CSL, Afterpay and Goodman Group kept gains in check.

What moved the market

Positive leads from the US and a rise in long-term interest rates provided a platform for the market’s third straight win, its best run since September. The ASX 200 closed at its highest level since September 27.

The major banks marched firmly higher as the ten-year Australian bond yield jumped eight basis points to 1.741 per cent. Higher rates are a plus for lenders because they allow room to expand margins. CBA gained 1.62 per cent, ANZ 1.33 per cent, NAB 0.49 per cent and Westpac 0.75 per cent.

Wall Street laid the foundations for the rally with a strong end to its best week since June. The Dow climbed 1.09 per cent on Friday to within 1 per cent of an all-time high.

The market shrugged off declines on Asian markets after China’s GDP report came in shy of expectations as factory output slowed more than expected. The Chinese economy expanded 4.9 per cent last quarter, down from growth of 7.9 per cent in Q2 and below the 5.2 per cent predicted by economists polled by Reuters.

Industrial production increased 3.1 per cent last month, well short of the 4.5 per cent market consensus. The headline misses were partly offset by better-than-expected retail sales.

“Since entering the third quarter, domestic and overseas risks and challenges have increased,” Fu Linghui, spokesperson for the National Bureau of Statistics, told a press conference.

The Asia Dow shed 0.58 per cent, China’s Shanghai Composite 0.35 per cent. Japan’s Nikkei 0.27 per cent Hong Kong’s Hang Seng 0.31 per cent.

“Despite battling a property crisis, energy crisis and outbreaks of the Delta variant in recent months, the Chinese economy is holding up reasonably well. That said, greater policy support appears needed to cushion the economy from persistent supply shocks,” CommSec chief economist Craig James said after the report.

Winners’ circle

Mining stocks surged on the back of an accelerating rally in industrial metals. Copper hit an all-time high in the US and zinc soared 8.2 per cent in London on Friday. Here, Nickel Mines climbed 5.08 per cent, Orocobre 4.85 per cent, Lynas Rare Earths 4.75 per cent, South32 3.93 per cent and OZ Minerals 4.55 per cent.

The major ore producers finished strongly in anticipation of further Chinese stimulus measures. Rio Tinto put on 1.86 per cent, Fortescue Metals 0.96 per cent and BHP 0.85 per cent.

Telecom infrastructure specialist Superloop jumped 22.16 per cent after selling its Hong Kong subsidiary and some Singapore assets for 30 per cent more than their carrying value. Funds affiliated with Columbia Capital and DigitalBridge Group will buy the assets for $140 million. Superloop will redeploy the funds into “more strategically aligned assets, higher growth opportunities and markets”, according to CEO and MD Paul Tyler.

Property giant GPT edged up 0.2 per cent after expanding its logistics portfolio with the $681.7 million acquisition of a portfolio from Ascot Capital. The acquisition includes 23 “logistics assets” and a six-level office in Canberra.

Poker-machine manufacturer Aristocrat Leisure will acquire Playtech, a UK-based gambling software and content supplier for $5 billion. Aristocrat will fund the acquisition with $1.1 billion in existing cash, new debt and a $1.3 entitlement offer. Share trading was suspended while the company taps capital markets.

Doghouse

The rates tailwind for lenders weighed on stocks that depend on cheap borrowing to fund growth. Afterpay eased 1.41 per cent, EML Payments 3.8 per cent and WiseTech 2.89 per cent.

Defensive bond proxies also struggled. CSL dipped 1.1 per cent, Goodman Group 1.31 per cent, Cromwell Property 2.42 per cent and Charter Hall 2.28 per cent.

Audinate sank 8.67 per cent after warning component supply issues will dent its second-half performance. The audio-visual networking company said an important US supplier could no longer guarantee delivery of open orders dating back to January.

The resignation of CEO and Managing Director Jonathan Rubinsztein pulled tech company Infomedia down 15.24 per cent. Rubinzstein was credited with a turnaround strategy that saw the firm’s shares more than triple in value in five years. Chair Bart Vogel reaffirmed revenue guidance. Non-executive Director Jim Hassell will act as CEO until a replacement is found.

Confirmation of a strong start to the financial year briefly lifted Temple & Webster to a six-week high. The online furniture retailer told today’s AGM it had experienced growth of 56 per cent since July 1 compared to the same period last year. The share price rose as high as $14.03 before fading to $13.04, a decline of 2.76 per cent.

Gold miner Ramelius sagged 2.46 per cent on news it will acquire Apollo Consolidated for an enterprise value of $128 million. Apollo owns the Lake Rebecca Gold Project in WA.

Wealth manager HUB24 eased 0.88 per cent on news it will acquire Class Limited in an all-scrip deal valuing the superannuation software business at around $386 million. Class Chair Matthew Quinn said the proposal represented “compelling value” for shareholders. Class shares jumped 61.33 per cent.

Other markets

An eight-week rally in oil showed no signs of abating. Brent crude rose 89 US cents or 1.05 per cent this afternoon to US$85.75 a barrel.

Gold dipped 20 US cents or 0.01 per cent to US$1,768.10 an ounce.

S&P 500 futures declined six points or 0.12 per cent.

The dollar eased 0.27 per cent to 74.04 US cents.

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