OZL Oz Minerals Limited

   By Robb M. Stewart 
 

MELBOURNE, Australia--Energy stocks led a second day of strong gains for Australia's equities market Thursday as worries over China's pace of growth ebbed.

The advance has wiped out almost all of Tuesday's dive to a two-year low, with broad gains across sectors pushing the S&P/ASX 200 up 1.8% to end at 5112.1.

The Australian benchmark index echoed the recovery in most Asian markets after China manufacturing data for September held steady from the previous month.

"Our biggest trading partner looks as if it may have stemmed its steady economic deterioration and this has clearly boosted a range of sectors today," said Angus Nicholson, a market analyst at IG in Melbourne.

Still, Mr. Nicholson said investors should be wary of such a strong market performance over two consecutive days, adding that the ASX could see some resistance as it approaches the 5150 level.

China's official manufacturing purchasing managers index for September rose to 49.8 from 49.7 the previous month, against economists' expectations it would remain unchanged. The Caixin China manufacturing PMI was at a six-and-a-half-year low of 47.2 in September, compared with a preliminary figure of 47.0 and 47.3 in August. Readings below 50 indicate a contraction in manufacturing activity.

The rise in market sentiment helped keep oil prices in positive territory in Asian trade. Prices took a beating in the third quarter, with Nymex and Brent crude each losing around 24% during the period and weighing heavily on energy stocks.

Woodside Petroleum Ltd. (WPL.AU) rose 2.9%, Oil Search Ltd. (OSH.AU) added 2.1% and Santos Ltd. (STO.AU) climbed 4.8%. Origin Energy lTD. (ORG.AU) shares remained halted after it launched on Wednesday an equity raising to help cut its debt burden.

The major banks were all higher, with Commonwealth Bank of Australia (CBA.AU) and Westpac Banking Corp. (WBC.AU) each gaining over 2%. Australia & New Zealand Banking Group Ltd. (ANZ.AU) rose 1.6% after it said Chief Financial Officer Shayne Elliot would succeed Mike Smith as chief executive in the new year.

OZ Minerals Ltd. (OZL.AU) shares surged 19% after private-equity firm KKR & Co. confirmed it had bought a stake in the copper and gold mining company.

For the day, 1.64 billion shares valued at 4.97 billion Australian dollars (US$3.49 billion) were traded, Commonwealth Securities said.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 01, 2015 03:16 ET (07:16 GMT)

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