SYDNEY: Australian shares ended higher on Wednesday in line with other markets, after troubled developer China Evergrande Group assured it would avoid default, dousing investor worries of an imminent crisis unleashing global financial chaos.

The S&P/ASX 200 index climbed 0.32% to close at 7,296.9, driven by energy and mining stocks. The benchmark closed 0.4% higher on Tuesday.

China Evergrande’s main unit said it negotiated a deal with bondholders to settle interest payments on a domestic bond.

“Evergrande’s decision gave some respite to the jittery markets that had been on edge in recent days over the potential default of the property developer,” said Kunal Sawhney, chief executive officer of Kalkine Group.

It also appears to have provided some support in recouping losses in the iron ore price, he added.

Major miners jumped 2.19%, as the prospect of a major hit to demand for materials from China’s real estate sector appeared to diminish. Miner Mount Gibson Iron Ltd led gains on the sub-index, climbing 11.63%, followed by metals and electronics recycling firm Sims Ltd jumping 6.14?%.

Energy stocks rose 2.25% tracking an uptick in oil prices, as industry data showed U.S. crude stocks fell more than expected last week in the wake of two hurricanes, highlighting tight supply as demand improves.


Comments are closed.