Construction stocks soared on Friday, after Australian dollar strengthened and mining stocks bounced back from their worst day in a month.
Key points:Construction stocks are soaring on the back of stronger mining stocks and strong demand from ChinaConstruction stocks surged on Friday after the Australian dollar rose against the US dollar as President Donald Trump said he wanted to boost the US economy.
The Australian dollar surged to trade at 85 US cents on Friday but was off by more than a cent when Trump spoke about the economy on Wednesday.
“We’re going to have a very strong economy.
We’re going and we’re going fast,” he said.”
And if we can build on what we have, then the economy is going to grow a lot.”
The US President had already said he was open to increased Chinese investment in the US.
But Chinese officials said he had not given them an answer to a question on the US interest rate increase.
China’s central bank Governor Zhou Xiaochuan said on Thursday that China was prepared to take on more debt in the event the US raised interest rates, adding the country had already taken on more than $US2 trillion in debt.
But on Friday the market was less convinced by China’s commitment.
China’s dollar rose to 85 US cent to trade above 85 US dollars earlier in the session.
It has been a tough week for the US manufacturing sector.
On Thursday, the Federal Reserve raised interest-rate forecasts for the first time in six years, but a week later it cut its benchmark rate by a quarter point.
There was a slight bounce in the mining market after it rose to its highest level in almost three months, boosted by a sharp rebound in mining demand.
Demand from China and other Asian nations had also been strong in the past fortnight.
China has been keen to expand trade with the US after the US agreed to boost tariffs on Chinese goods and services.
And Chinese officials have been quick to respond to President Trump’s demand for more foreign direct investment in infrastructure projects, particularly in the manufacturing sector, as part of efforts to rebalance the economy.
“We are looking forward to continuing our strong trade and investment relationship with the United States,” China’s Minister for Commerce Wang Yi told reporters on Thursday.
“The two sides are also working on the necessary measures to improve bilateral trade, as well as to develop joint projects to promote global trade and trade benefits.”
But China’s stock market also showed signs of trouble.
Investment in the construction sector has been weak in recent weeks as demand from the US fell.
Construction stocks slumped as the US dropped a further one-tenth of a cent to close at 8.85 US cents.
However, they rose by a third after the dollar strengthened against the Australian.
US construction stocks surged as construction orders soared in the last week.
Meanwhile, mining stocks rebounded from their biggest one-day fall since June, falling by half a cent.
Mining stocks are down by more, after mining firms reported a record $US15 billion ($16.7 billion) loss in the month of October.