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Australia shares jump 1.2 pct on Wall St rally, eye China data
July 10, 2013 / 2:06 AM / 4 years ago

Australia shares jump 1.2 pct on Wall St rally, eye China data

(Adds analyst comments, stocks on the move)

SYDNEY, July 10 (Reuters) - Australian shares jumped 1.3 percent in late morning trade on Wednesday, following extended gains on Wall Street and improved sentiment, but the volume was lower than average due to the holiday season and caution ahead of Chinese trade data.

Top miners underpinned the index. BHP Billiton Ltd rallied 2.3 percent and rival Rio Tinto Ltd gained 2.2 percent.

“There is probably a little bit of bargain hunting around, especially in the resources sector which has been seriously over-sold,” said Martin Angel, a dealer at Patersons Securities in Perth.

The S&P/ASX 200 index gained 64.3 points to 4,946.0 by 0155 GMT. The benchmark rose 1.5 percent to its highest close in one month on Tuesday.

Investors were also betting on the chance for a rate cut by the Reserve Bank of Australia in August, said Will Cleland, associate director of institutional dealing at Phillip Capital in Melbourne.

“The IMF slashed global GDP forecast yesterday, so I guess that has increased the odds of a rate cut next month,” he said. “It is more likely than unlikely that they will cut next month.”

The International Monetary Fund trimmed its global growth forecast on Tuesday for the fifth time since early last year due to a slowdown in emerging economies and the woes in recession-struck Europe.

Meanwhile, a measure of Australian consumer confidence held steady in July as people became more optimistic on the economic outlook even as they fretted about their personal finances.

The market was trading in lower-than-average volume as more people were either away on holidays or simply awaiting more clues, Patersons’ Angel said.

“A lot of people still sit on the sidelines wondering what they are going to do. They want to see further good economic numbers out of China,” he said.

China will release trade and lending data for June shortly. The country is Australia’s biggest trading partner, and its trade data will provide clues about the country’s appetite for Australia’s resources.

Banks continued to push higher. Top lender Commonwealth Bank of Australia gained 1.2 percent, while junior Australia and New Zealand Banking Group jumped 1.5 percent.

Consumer stocks were also in favor, with supermarket Woolworths Ltd adding 1.4 percent and rival Coles owner Wesfarmers Ltd rising 1.0 percent.

Pharmaceutical products maker CSL Ltd jumped 1.9 percent, and Australia’s biggest phone company Telstra Corp Ltd rose 0.6 percent.

New Zealand’s benchmark NZX 50 index rose 0.1 percent in early trade.

STOCKS ON THE MOVE

* Gold miner Resolute Mining Ltd surged 8.0 percent to A$0.61, as gold prices recovered and held near one- week high.

(0144 GMT)

* Virgin Australia Holdings Ltd lost 1.1 percent to A$0.45, after Australia’s competition regulator said it plans to approve the trans-Tasman alliance between Virgin and Air New Zealand Ltd for another three years with extra conditions, rather than the five unconditional years the pair had sought.

(0146 GMT)

* Qantas Airways Ltd jumped 3.2 percent to A$1.36 after the Australian regulator’s decision on Virgin.

(0150 GMT)

Reporting by Maggie Lu Yueyang; Editing by Jacqueline Wong

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