Australia shares up on Telstra results, policy cues from jobs data
(Adds stocks move, analysts comments)
SYDNEY Aug 8 (Reuters) - Australian shares rose 0.7 percent on Thursday morning, with phone giant Telstra Corp Ltd rising after reporting strong earnings, while buying picked up as an unexpected fall in employment appeared to bolster the case for another interest rate cut.
Australia's July employment fell 10,200 against expectations for an increase of 5,000, while the jobless rate remained at 5.7 percent due to a falling participation rate.
The data confirmed there was plenty of slack in the labour market which would allow the Reserve Bank of Australia (RBA) to ease policy again, should this week's cut to 2.5 percent fail to enliven the economy.
"It's consistent with most people's perception of the labor market that is certainly on the softer side." said Macquarie Bank senior economist Brian Redican.
"We do think that the Reserve Bank will be compelled to keep on cutting rates over the second half of this year. We've got 2 percent cash rate target by the year end."
The S&P/ASX 200 index added 34.9 points to 5,046.2 by 0219 GMT, The local benchmark dropped 1.9 percent on Wednesday, its biggest fall in 5-1/2 weeks.
"We actually got sold down a lot more than the region yesterday. Maybe a bit of catch-up after that," said Simon Twiss, a dealer at Arnhem Investment Management in Sydney.
The local market's bounce came despite a soft lead from Wall Street, which lost ground for a third consecutive session on growing uncertainty over the Federal Reserve's stimulus program.
Investors also looked out for trade data from China, Australia's biggest export market. The data is due out shortly.
Australia's biggest telecommunication company climbed 1.5 percent after reporting a 13 percent rise in its 2013 full year net profit. It was also the most traded stock in the market.
"Telstra has been a darling stock for the last two and half years...Today's product figures coupled with the slight beat on earnings look like justification for this darling label," said IG analyst Evan Lucas in a note.
Global miner BHP Billiton Ltd pared earlier gains and was almost flat, while rival and Rio Tinto Ltd edged up 0.6 percent after copper prices steadied and iron ore extended gains overnight.
Mining stocks have been struggling in recent months on concerns about soft commodities prices and a slowdown in China's demand.
Rio Tinto is due to report its first half earnings later on Thursday. Rio's Alcan division said on Wednesday it will shut down its aluminum smelter in Shawinigan, Quebec, by the end of November.
Financial stocks bounced slightly after Wednesday's sharp slide, with top lender the Commonwealth Bank of Australia rising 0.6 percent and Westpac Banking Corp 0.7 percent.
The flagship banks, which currently have high dividend yields that average some 5.3 percent each, have gained about 18 percent so far this year.
Karoon Gas tumbled 6.6 percent after it said it had completed a A$150 million capital raising exercise.
Intrepid Mines Ltd lost 3.9 percent after it said its chief executive had quit and it failed to make any progress in talks to reclaim rights to a $5 billion copper and gold project in Indonesia.
New Zealand's benchmark NZX 50 index fell 0.2 percent to 4,537.6.
(Reporting By Maggie Lu Yueyang and Thuy Ong; Editing by Shri Navaratnam)
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