(Adds analysis, quotes, stocks on the move)
SYDNEY Oct 3 Australian shares rose 0.5 percent
on Thursday, buoyed by mining stocks after a recovery in metals
prices but gains were capped by Wall Street's falls amid the
ongoing U.S. government shutdown.
Mining stocks underpinned the market after copper rose off a
one week low. BHP Billiton Ltd climbed 1.1 percent
while rival Rio Tinto Ltd added 1 percent. Iluka
Resources Ltd rallied 2.4 percent.
Gold producers Newcrest Mining Ltd and Evolution
Mining Ltd jumped 2.5 percent and 3 percent
respectively after bullion rose more than 2 percent as a fall in
U.S. equities sparked bargain-hunting.
The S&P/ASX 200 index rose 26.6 points to 5,242.2 by
0100 GMT, and has been trading sideways for most of this week
after a slump on Monday. The benchmark rose 0.2 percent on
"It's a fairly broad-based strength actually, the banks and
resources are doing okay," said Damien Boey, equity strategist
at Credit Suisse.
"That seems to be the thematics, but it's not a huge move
Stocks with high dividend yields also gained, including the
Big Four banks, which yield on average 5.4 percent each.
National Australia Bank rallied 1.3 percent while
Westpac Banking Corp added 0.8 percent.
Top telecommunications provider Telstra Corporation Ltd
, which yields 5.7 percent, gained 0.6 percent.
Elsewhere, Leighton Holdings Ltd slumped 8.8
percent to a one-month low of A$17.86 after media reports that
corruption and bribery were widespread at the company under its
Also adding a dampener to local sentiment, Wall Street
retreated overnight, on the second day of a partial U.S.
government shutdown, as political wrangling in Washington raised
investor concerns that the stoppage could be prolonged.
So far investors have been wagering that a deal would be
reached in time to avoid lasting damage to the economy, although
another fight over the debt ceiling still looms.
"This week has seen a muted Australian market as investors
sit back and watch the U.S. debt funding/debt ceiling
negotiations unfolding," said Chay Flack, equities dealer at CMC
"There isn't any panic yet, but if no agreement is reached
beefore the October 17 deadline, we may find ourselves in the
calm before the storm."
New Zealand's benchmark NZX 50 index slipped 0.2
percent or 11.5 points to 4,757.4.
(Reporting by Thuy Ong; Editing by Eric Meijer)