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Australian shares climbed for a third day ahead of a lunchtime economic update from trading partner China.

The S&P/ASX 200 overcame a mid-morning wobble to reach mid-session 25 points or 0.35 per cent ahead.

Gains in the heavyweight banks and some of the miners outweighed declines in growth and defensive stocks. Commonwealth Bank, ANZ and Westpac were the pick of the heavyweights. Afterpay, CSL and Goodman Group dragged.

What’s driving the market

A choppy morning saw local shares track the ebb and flow of US equity futures following Wall Street’s best week since June. S&P 500 futures fell 0.2 per cent before trimming their decline to three points or 0.07 per cent. Australian shares briefly turned negative before rising again as US futures came off their lows.

On Friday, the Dow climbed 1.09 per cent to within 1 per cent of its all-time high. The S&P 500 gained 0.75 per cent.

ASX gains were kept in check by concerns today’s 1 pm AEDT report will show Chinese growth slowed significantly last quarter. Economists have slashed their forecasts to reflect the impact of power shortages, a property slump, a regulatory crackdown and Covid lockdowns. Growth in gross domestic product is expected to have slowed to 5 per cent from 7.9 per cent the previous quarter.

The session began strongly after New South Wales hit another vaccination milestone and Victoria announced plans to ease lockdown restrictions.

“VIC is set to follow NSW and the ACT in re-opening, bringing forward its re‑opening date to Friday October 22 (from October 26). NSW also starts its second stage of re-opening today with masks no longer required in offices… after having hit 80% full adult vaccination (currently 80.3% are fully vaccinated, while those with at least one dose sits at 92%),” NAB Director, Economics, Tapas Strickland, said.

“Meanwhile progress on easing the international border is set to occur earlier than expected with NSW set to lift quarantine requirements for fully vaccinated travellers and lift incoming traveller caps from November 1.”

Going up

The big four banks led the advance as long-term interest rates rallied. The yield on ten-year Australian government bonds jumped more than four basis points to 1.705 per cent. CBA gained 1.25 per cent, ANZ 1.22 per cent, NAB 0.4 per cent and Westpac 0.75 per cent.

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, OZ Minerals climbed 3.28 per cent, Orocobre 3.66 per cent, South32 3.66 per cent and Nickel Mines 4.06 per cent.

The major ore producers turned mixed as China’s ore markets opened. Rio Tinto put on 0.71 per cent. Fortescue Metals faded 0.48 per cent and BHP 0.23 per cent.

Telecom infrastructure specialist Superloop jumped 20.1 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 0.59 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.

Going down

The rates tailwind for lenders weighed on stocks that depend on cheap borrowing to fund growth. Afterpay eased 0.99 per cent, EML Payments 2.85 per cent and Nanosonics 1.65 per cent.

Defensive bond proxies also struggled. CSL dipped 0.81 per cent, Goodman Group 0.56 per cent, Abacus Property 1.24 per cent and Elders 1.19 per cent.

Audinate sank 7.14 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 14.63 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 $13.15, a decline of 1.94 per cent.

Gold miner Ramelius sagged 2 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.

Other markets

A negative morning on Asian markets saw the Asia Dow shed 0.45 per cent, China’s Shanghai Composite 0.04 per cent. Japan’s Nikkei 0.27 per cent Hong Kong’s Hang Seng 0.7 per cent

An eight-week rally in oil showed no signs of abating. Brent crude rose 83 US cents or almost 1 per cent this morning to US$85.71 a barrel.

Gold bounced US$3 or 0.17 per cent to US$1,771.30 an ounce.

The dollar eased 0.1 per cent to 74.17 US cents.

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