The Wrap: ASX gains despite China’s economy going into retreat

Welcome to your five-minute recap of the trading day, and how the experts saw it.

The numbers:The ASX 200 managed to finish higher, up 0.25 per cent to 7093 points, despite Australia’s mining giants taking a hit after China revealed that its COVID lockdowns triggered an economic slump in April. Health care and the materials sector – which includes mining stocks – were the only sectors to close lower with industrials leading the gains thanks to a potential bid for $15 billion pallet supplier, Brambles.

The lifters: Brambles 11.2%, Qube 5.8%, Pilbara Minerals 5.3%

The laggards: Imugene -5.7%, City Chic -5.3%, Zip Co -4%

The lowdown: For once, the influence of Wall St only told half the story of the ASX 200’s resurgence on Monday. A potential bid for Brambles lit a match under the stock and single-handedly drove the industrials sector to the biggest gains for the day, beating out the tech sector which had followed Wall Street’s tech-heavy lead.

The materials and energy sector provided some early support, but this caved after China reported that its economy cooled sharply in April with COVID-19 lockdowns taking a heavier toll than predicted, and added to fears that the economy could shrink in the second quarter.

Our big miners went into retreat with Fortescue down more than 2 per cent, while Rio Tinto and BHP closed more than 1 per cent lower.

Of specific concern to Australia was the news that China’s import growth flat lined in April, according to Barclay’s chief China economist Jian Chang.

“Looking at the breakdown, the continued contraction in the volume of major commodity imports (base metals and energy) was the major drag on headline imports, although rising global prices meant there was growth when measured in value terms,” she said.