Australia shares jump 1.3 pct, banks lead on strong earnings hopes
SYDNEY, Oct 28 (Reuters) - Australian shares jumped 1.3 percent on Monday morning, as major banks rallied on expectations of another stellar set of earnings from a sector that has produced record profits recently. Blue chip resources also gave the market a boost, with global miners BHP Billiton Ltd and Rio Tinto Ltd adding 1.2 percent and 1.3 percent respectively, underpinned by a survey showing improved Chinese manufacturing on Friday. The market opened with a firm lead from Wall Street, with the S&P 500 ending at another record high on Friday. The S&P/ASX 200 index added 69.3 points to 5,455.6 by 0105 GMT. The benchmark inched up 0.3 percent on Friday. The big four banks - Australia and New Zealand Banking Group Ltd (ANZ), Commonwealth Bank of Australia, National Australia Bank Ltd (NAB) and Westpac Banking Corp - dominated early interest. The four heavyweights are on track to report a combined record profit for the fifth consecutive year. ANZ bank will report its full year earnings on Tuesday, followed by others in coming weeks. CBA climbed 1.4 percent to a new record high of A$77.38, and NAB jumped 2.0 percent. The banking sector has had a stellar year with share prices buoyed by strong dividend yields and record profits. "What a lot of traders have seen last week is there was actually a fair amount of room to move," said Kara Ordway, an analyst at City Index. "We are however heading into a week of fairly high risk, with U.S. employment numbers and retail sales (due out)." Evan Lucas, a market strategist at IG, believes the market would probably consolidate after the recent rally. "I see the momentum continuing this week, however the price action leads me to believe the market is starting to be priced to perfection and the momentum may turn post bank earnings reports," Lucas said in a note to clients. Domestic consumer-exposed stocks had a better run as well, with top supermarket Woolworths Ltd rising 1.1 percent and rival Coles-owner Wesfarmers Ltd tacking on 1.2 percent. Australia's biggest phone company Telstra Corp Ltd advanced 1.3 percent. Greenland Minerals and Energy Ltd soared 15.6 percent, after Greenland's parliament voted last week to end a decades-long prohibition on mining for radioactive materials like uranium. The New Zealand market was closed for a public holiday. (Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam)
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