(Updates with comments, stocks on the move)
MELBOURNE Dec 3 Australian shares gained 0.5
percent on Monday to a five-week high, as investors bet on the
Reserve Bank of Australia cutting its policy interest rate this
week to boost the economy.
Weaker than expected retail sales data released on Monday
supported expectations for a rate cut by the central bank at its
policy meeting on Tuesday. Following the data,
interbank futures pointed to a 75 percent chance that
the bank would ease rates.
A Reuters poll released on Sunday showed 16 of 23 economists
expect the RBA to cut ts cash rate by 25 basis points to 3.0
percent, matching record lows seen during the global financial
A rate cut would help support equities and would fend off
economic weakness in the first quarter, CMC Markets chief market
strategist Michael McCarthy said.
The benchmark S&P/ASX 200 index advanced 20.3 points
to 4,526.3 at 0034 GMT, after touching its highest intraday
level since Oct. 24.
The benchmark rose 2.1 percent last week, though November's
0.2 percent slip was the first monthly decline since May.
Gains were led by miners after China's official Purchasing
Managers Index pointed to continued demand for Australia's
mineral exports. Top miner BHP Billiton rose 0.5
percent to A$34.57.
"We have seen some strength in the commodities complex,"
Despite the increased expectations for a rate cut, retailers
were mixed after data showed Australia's retail sales were flat
in October, missing economists' expectations for a rise of 0.4
"The question in investors' minds is whether the weakness we
are seeing in retail is cyclical or structural, and people are
leaning towards structural," McCarthy said.
Among the top retailers, department store Myer Holdings
fell 1.6 percent and smaller rival David Jones
lost 2.2 percent.
New Zealand's benchmark NZX 50 index eased 0.2
percent to 4,043.3.
STOCKS ON THE MOVE
* Shares in Woodside Petroleum Ltd gained 0.8
percent to A$34.08 after the company said it will acquire a 30
percent interest in a major liquefied natural gas (LNG)
discovery off the coast of Israel in a $1.25 billion deal.
* Shares in Gindalbie Metals Ltd slumped 10.2
percent to A$0.265 after the iron ore junior completed a A$40
million fully underwritten placement to institutional and
(Reporting by Victoria Thieberger; Editing by Simon