Australia shares tick higher, though constrained by resources

Sun Jul 20, 2014 10:50pm EDT

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By Thuy Ong and Gyles Beckford

SYDNEY/WELLINGTON, July 21 (Reuters) - Australian shares rose 0.2 percent on Monday, underpinned by a rebound on Wall Street and a robust banking sector, though gains were limited by the resources sector as metals prices fell.

U.S. stocks rose on Friday, rebounding a day after the S&P 500 suffered its worst slide since April 10, with the three major indexes gaining.

Commonwealth Bank of Australia, Australia's top bank by market capitalisation, added 0.1 percent, while top lender by assets, National Australia Bank, rose 0.2 percent.

Other financials including insurance companies also propped up the market, with Suncorp Group climbing 0.8 percent and Insurance Australia Group Ltd gaining 0.7 percent.

Stocks among the 'Big Four' banks were bid up as investors went for high dividend yields of 4.7 percent to 5.7 percent.

The S&P/ASX 200 index was 9 points higher to 5,540.7 by 0236 GMT. The benchmark added 0.2 percent on Friday and rose 0.8 percent for the week.

"A rebound on Wall Street has provided the impetus for our local share market to eke out a small gain," said Niall King, a sales trader at CMC Markets, adding that the market would see a quiet week before Wednesday's local inflation reading and Thursday's flash manufacturing read from China.

Gains were capped by a fall in copper, which recorded its biggest weekly drop in 18 months, while profit-taking sent gold prices lower after a rally in the previous session on the shooting down of a passenger plane in eastern Ukraine.

Among resource stocks, gold producers Medusa Mining Ltd and Newcrest Mining Ltd declined 0.8 percent and 1 percent.

Global miners BHP Billiton Ltd and Rio Tinto Ltd slipped 0.4 percent and 0.8 percent each.

The benchmark index reached a six-year high of 5,561.1 on July 17 and again tested the level on Monday, but without a major catalyst the benchmark has not been able to break through that pivotal level.

Antares Energy soared 9.3 percent after saying it has received an unsolicited takeover bid for the company.

Caltex Australia Ltd bounced 3.8 percent to A$23.95, its highest since 2007 after saying its sales from production in June 2014 were higher than the prior year and 15 percent higher than the preceding month.

Fairfax Media Ltd jumped 2.5 percent after local media reported Gina Rinehart, who owns nearly 15 percent of the company, is considering a takeover bid. Shares in Fairfax have bounced 46.5 percent so far this year.

New Zealand stocks edged up to a one week-high as they mirrored the tentative lift in sentiment in the region.

The benchmark NZX-50 index was up 14.15 points or 0.3 percent to 5123.07.

Software company Xero Ltd continued to trade wildly, rising 2.3 percent to NZ$24.05, while national carrier Air New Zealand rebounded from last week's knee-jerk sell-off after the downing of the Malaysian Airways jet, rising 3.1 percent to NZ$2.01.

There was no corporate news of note, with the annual reporting season due to start in a couple of weeks.

There are two new listings this week, with software company ikeGPS Ltd IPO-IKE.NZ debuting on Wednesday, and fruit grower and exporter Scales Corporation IPO-SCA.NZ on Friday.

(Editing by Eric Meijer)

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