Australia shares hit fresh 5-year high on U.S., China optimism
(Adds analysis, quotes, stocks on the move)
SYDNEY Oct 21 (Reuters) - Australian shares rose 0.7 percent on Monday to hit a fresh five-year high, buoyed by news of improving economic growth in China and stronger-than-expected earnings results from some U.S. companies.
Blue-chip financials and basic materials stocks underpinned the market in a broad rally.
Among banks, Australia and New Zealand Banking Group climbed 1.1 percent, Commonwealth Bank of Australia rose 0.4 percent and National Australia Bank advanced 1.1 percent.
Iron ore miners BHP Billiton Ltd and Rio Tinto Ltd added 1 percent and 0.7 percent, respectively, after copper prices rose on Friday, supported by data showing China's economy expanded as forecast in the third quarter.
"Forward earnings suggest Australia stocks are good value," Tim Radford, global analyst at Rivkin Securities, said in a note to clients.
"Technically, momentum is again to the upside, and with stocks entering a seasonally strong period amid a significant reduction in headline risk," he said.
The S&P/ASX 200 index was up 35.8 points at 5,357.3 as of 0027 GMT, hitting its highest point since June 20, 2008.
The benchmark rose 0.7 percent on Friday, and has recovered from a one-month low hit this month during the U.S. debt ceiling impasse. Dealers said the end of the stalemate has bolstered investor confidence.
The local index took a cue from Wall Street, where the S&P 500 closed at a record high to cap its biggest weekly gain in three months, underpinned by better-than-expected earnings from Google, Morgan Stanley and others.
Wealth management firms also gained, with AMP Ltd climbing 1.7 percent and Platinum Investment Management Ltd adding 0.9 percent.
Retail staple Woolworths Ltd jumped 2.4 percent and rival Wesfarmers Ltd added 0.5 percent.
Blood products maker CSL Ltd bucked the trend and fell 0.7 percent, with dealers saying investors were looking to take profits on the strong healthcare sector.
Sundance Resources Ltd soared 16.2 percent and hit a six-month high of A$0.11, continuing its recent rally.
"It looks like something's going on with some offtake agreements as far as iron ore shipments are concerned," said Michael Heffernan, senior client adviser and economist at broker Lonsec.
"Obviously the market thinks there's something going on there that will be very positive for them."
But Qantas Airways dropped 4.4 percent after Chief Executive Alan Joyce said at its annual general meeting on Friday that yields, or returns on fares, would decline by 2 percent to 3 percent in the first half compared with the same period last year.
New Zealand's benchmark NZX 50 index rose 0.5 percent or 24.6 points to 4,783.2. (Reporting by Thuy Ong; Editing by Chris Gallagher)
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