Australia shares close at 20-month high, banks strong

Thu Jan 17, 2013 12:58am EST

(Adds details, comments)
    SYDNEY, Jan 17 (Reuters) - Australian shares rallied 0.4
percent to a 20-month high, buoyed by financial stocks and
retailers as data showing an unexpected fall in Australian
employment in December increased the chances of a further
interest rate cut.
    Financials lead the index higher, with QBE Insurance
 up 2.3 percent and insurer and bank Suncorp Group
 up 1.8 percent. Big banks were firmer, headed by
Westpac Banking Corp with a 0.7 percent gain.
    The S&P/ASX 200 index finished the day 18.2 points
higher as 4,756.6, having risen as much as 1.0 percent at one
point, and added to Wednesday's 0.5 percent rise.
    "The ASX 200 continued to punch higher after trading through
this year's high at 4,750 as the local fourth-quarter earnings
season started in earnest," said Stan Shamu, market strategist
at IG Markets. 
    "Defensives are mostly leading and we suspect this was a
result of investors piling back into yield plays and other
defensives ahead of what seems to be a fairly uncertain month
for risk."
    Defensives finished the day firmer. Blood products maker CSL
Ltd gained 0.6 percent, while energy provider AGL
Energy rose 0.5 percent.
    Retailers also improved on the hopes for a boost to economic
activity, with furniture and electrical goods store Harvey
Norman jumping 2.6 percent. Supermarket giants
Wesfarmers Ltd and Woolworths Ltd jumped 1.4
percent and 1 percent respectively.
    Australian employment unexpectedly dipped 5,500 in December
while the jobless rate nudged up 5.4 percent, a soft report that
led markets to narrow the odds of further rate cuts.
 
    Iron ore miner BHP Billiton Ltd rose 0.3 percent,
but rival Rio Tinto bucked the trend, dropping 1.5
percent.
    Santos climbed 0.7 percent after it announced a 10
percent lift in annual production to 52.1 million barrels of oil
equivalent (mmboe). 
    Iluka Resources surged 3.7 percent after announcing
fresh steps to cut costs. 
    Molopo Energy Ltd soared 7.4 percent. The oil and
gas exploration and production company announced a new CEO and
said details of a strategic review will be announced before the
first quarter of 2013. 
    New Zealand's benchmark NZX 50 index rallied 0.7
percent, or 27.6 points to 4,196.8, hovering at five-year highs.

 (Reporting by Thuy Ong; Editing by Richard Pullin)