Australian shares jump

Australian shares rose 1 percent on Thursday, as an upbeat Chinese manufacturing survey helped miners claw back recent steep losses from slumping iron ore prices. China's factory sector turned in its best performance in five months in May, a preliminary HSBC survey showed, though overall manufacturing growth still contracted slightly in a suggestion that the outlook remains murky. China is Australia's largest export market.
The S&P/ASX 200 index advanced 55.3 points to 5,479.9 at the close of trade, its biggest one-day percentage gain since February 12. The benchmark added 0.1 percent on Wednesday. New Zealand's benchmark NZX 50 index added 0.4 percent to 5,128.8. All 'Big Four' banks rose, with top lender Commonwealth Bank of Australia adding 0.5 percent.
Overnight, spot iron ore prices fell for a fourth straight day to a 20-month low, pressured by weak buying interest from china, the world's top consumer of the steelmaking raw material. Meanwhile heavyweight miners Rio Tinto Ltd and BHP Billiton Ltd added 0.4 percent and 1.2 percent each, recovering modestly after being sold off over the past week. Investors will also eye the Chinese HSBC flash manufacturing PMI for May due at 0145 GMT.
"If the PMI number is outside of expectations significantly it will affect the big three, Rio, BHP, Fortescue", said Shawn Hickman, managing director at Market Matters "The market is a bit 50/50, so we just want to see it play its hand, the whole region is up around 0.4 percent, there's not a great deal at the moment." Energy stocks also rose, underpinned by US oil reaching a one-month high overnight. Woodside Petroleum Ltd climbed 2 percent, while Santos Ltd added 1.1 percent.
Australia's benchmark index has been drifting sideways in May, pulled down by top-tier banking stocks with investors booking profits as shares have reached record highs, but underpinned by robust earnings. Worries over geopolitical tensions in Ukraine and slumping iron ore prices have also dampened investor appetite. James Hardie Industries PLC jumped 2.8 percent after the home building products manufacturing announced its fourth quarter net sales were higher at A$376.4 million while also announcing a special dividend of $0.20 per security. Caltex Australia gained 2.3 percent after receiving confirmation from the Australian Competition and Consumer Commission (ACCC), who will not oppose its acquisition of the fuel division of Scotts Group.