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SYDNEY, April 29 Australian shares rose 0.6
percent to its highest close in seven weeks on Monday, led by
strong gains in the banking sector as investors chased high
yielding stocks in a session characterized by some caution after
Friday's disappointing U.S. first-quarter growth figures.
Westpac Banking Corp posted the largest gain in the
sector, jumping 1.7 percent while top lender, the Commonwealth
Bank of Australia climbed 1.1 percent.
"Investors and traders doing what they seem to know
best - buying yield names," said Chris Weston, chief market
strategist at IG Markets.
"The banks will be in play given they (except CBA) report H1
Australia and New Zealand Banking Group added 0.7
percent. ANZ is due to report its half year earnings on Tuesday.
Dividend yield on average for the four banks is some 5.1
percent, compared with between 3 percent and 4 percent yields
for a typical 12-month deposit account.
The S&P/ASX 200 index climbed 28.3 points to finish
at 5,125.8, its highest close since March 8.
Despite the modest loss of 0.1 percent on Friday, the market
posted a 3.4 percent gain for the week - its biggest advance
since December 2011. Last week's advance was underpinned by
buying in previously beaten down sectors and demand for
financial stocks for their attractive dividend yields.
"We're still around the 5,100 point mark, I don't think
that's changing too much at the moment. We're still very much on
an upward trend when it comes to how we've performed in recent
months and week," said Steven Daghlian, market analyst at
"We've been increasing and improving quite strongly so far
this month, we're up about 2.5 percent, and pretty much wiped
out all the losses recorded last month."
A run of weak data from the United States, China and Germany
over the past few weeks have weighed on the Australian market,
but underlying demand has been sustained by a resilient domestic
economy and a strong earnings season. The benchmark index has
gained around 10 percent so far this year.
On Friday, U.S. data showed gross domestic product expanded
at a 2.5 percent rate in the first quarter, below estimates of 3
percent, heightening fears the economy could struggle to cope
with deep government spending cuts and higher taxes that kicked
in earlier this year.
Mining stocks underperformed due to weak metals prices and
concerns about slowing global demand for commodities. Mining
heavyweights BHP Billiton Ltd and Rio Tinto Ltd
fell 0.1 percent and 0.8 percent respectively.
BHP Billiton has agreed to sell its Pinto Valley copper mine
and a railroad in Arizona to Capstone Mining Corp for
$650 million, reaping far more than expected as the top global
miner tightens its belt in a weaker market.
Copper drifted lower on Monday as slower-than-expected U.S.
growth hurt the demand outlook for the metal.
Defensives were firmer, with supermarket retailer Woolworths
Ltd up 0.3 percent and top telecommunications provider
Telstra Ltd 0.2 percent higher.
New Zealand's benchmark NZX 50 index climbed 0.7
percent or 32.3 points to a record closing high of 4,580.96.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)