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An unexpected rebound in Chinese manufacturing helped propel Aussie shares to a three-week peak as iron ore miners reached multi-year highs. 

The ASX 200 surged 50 points or 0.8 per cent to 6231, setting up the index’s first close above 6200 since early March. 

Resource stocks did much of the heavy lifting after data released over the weekend showed the Chinese economy recovered last month, improving the demand prospects for Australian raw materials. A measure of Chinese manufacturing activity edged up to 50.5, the strongest reading in four months and a sign that government stimulus efforts may be having an impact. A separate private measure released this morning also turned higher. 

Index heavyweight BHP rallied 1.6 per cent to its highest point since July 2011. Rio Tinto advanced 1.9 per cent to a post-GFC high after announcing operations were resuming at its Pilbara operations following Tropical Cyclone Veronica and the impact on production would be relatively minor. Fortescue Mining also hit its strongest level since the financial crisis, rising 5.1 per cent.

Woolworths rang up its best price since last July after announcing an off-market buy-back to return up to $1.7 billion to shareholders. The offer by tender will open later this month. Shareholders sniffing a bargain lifted the share price 2.2 per cent. 

Shares in baby formula maker Bubs Australia retreated after the company announced a conditional deal to buy rival Australia Deloraine Dairy in Victoria. The company will pay the vendors with a mix of cash and shares funded by a capital raising at a discount to the current share price, which explains why shares fell 2.5 per cent this morning.

Energy stocks edged up 0.7 per cent after crude oil regained the $US60 a barrel level. West Texas Intermediate oil futures advanced another 37 cents or 0.6 per cent this morning to $US60.50 a barrel and are now ahead of where they were when US President Donald Trump demanded OPEC do something about rising prices. 

The morning’s economic data provided plenty of talking points for the Reserve Bank board meeting tomorrow. House prices fell 0.6 per cent last month, extending the total decline in value since the peak in October 2017 to 7.4 per cent, according to CoreLogic. The local manufacturing gauge showed the sector expanded last month at its weakest rate in three months. And business confidence slumped to a four-year low, according to NAB’s monthly survey. 

US stock futures trended higher this morning with Asian markets. S&P 500 futures were recently up a bullish 18 points or 0.6 per cent. China’s Shanghai Composite charged 1.7 per cent, Hong Kong’s Hang Seng 1.6 percent and Japan’s Nikkei 1.9 per cent. 

With risk assets back in favour, gold ticked lower. US gold futures were lately off $1 or 0.1 per cent at $US1,297.50 an ounce. The dollar was buying 71.2 US cents, boosted by the Chinese data.

A busy start to the week coming up both here and abroad. A huge day here tomorrow with the Reserve Bank due to update its rate outlook and announce any change to the current cash rate of 1.5 per cent. Building approvals figures are also scheduled ahead of the release of the Federal Budget tomorrow night. Overseas, Europe has inflation, employment and manufacturing reports, as well as another instalment in the Brexit saga. Wall Street has retail sales figures, business inventories and a manufacturing update.

BHP by the numbers
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