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Australia shares nudge higher on China PMI; banks lead
July 24, 2014 / 2:55 AM / 3 years ago

Australia shares nudge higher on China PMI; banks lead

* Shares tick 0.2 pct higher, banks lead, gold miners slip

* 116 stocks trading higher, 65 lower, 19 unchanged (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Naomi Tajitsu

SYDNEY/WELLINGTON, July 24 (Reuters) - Australian shares added 0.2 percent on Thursday, extending a six-year high, as Wall Street climbed and sentiment was boosted by a preliminary Chinese manufacturing index rising at its fastest pace in 18 months.

Banks propped up the local market with Commonwealth Bank of Australia and National Australia Bank adding 0.4 percent and 0.2 percent each.

The S&P/ASX 200 index added 8.2 points to 5,584.9 by 0222 GMT, its highest since June 2008. The benchmark added 0.6 percent on Wednesday.

The index has been underpinned by signs that the economy in China, Australia’s largest export market, is regaining momentum, while a robust earnings season in the United States has also lifted investor sentiment.

“It’s just drifting higher in front of reporting season, that might change in a week or two’s time so we’ll just have to wait and see,” said Donald Williams, chief investment officer at Platypus Asset Management.

Miners were mixed as Chinese steel and iron ore futures slid, but activity in China’s factory sector expanded at its fastest pace in 18 months in July, a preliminary HSBC survey showed, as a raft of government stimulus measures kicked in.

Among miners, BHP Billiton Ltd dipped 0.2 percent, while Rio Tinto Ltd tacked on 0.8 percent.

Gold miner Newcrest Mining Ltd slumped 4.4 percent after warning it expects to take post-tax impairments of up to A$2.5 billion in fiscal 2014. That pushed the gold sector lower with Beadell Resources Ltd and Resolute Mining Ltd down 0.9 percent and 1.9 percent each.

Macquarie Group dumped 2.1 percent after the investment bank said results for the year ending March 2015 would be in line with the previous year, though it highlighted short-term challenges such as foreign exchange and tax uncertainties.

Lynas Corp jumped 2.5 percent to a 3-month high of A$0.20, gaining for the sixth straight session.

“For now it’s really about streamlining their project (in Malaysia), that’s when the stock price started rising and it’s slowly recovering,” said Stan Shamu, market strategist at IG.

Paladin Energy Ltd jumped 2.7 percent after announcing a settlement sale of its minority interest in its Langer Heinric mining operation.

Insurance Australia Group Ltd climbed 2.2 percent to an 8 month high of A$6.17 after saying its financial performance in the 2014 business year has benefited from favourable natural peril and credit spread outcomes in the second half.

New Zealand’s benchmark NZX-50 index rose 25.32 points to 5,171.64, its best level in nearly two weeks, boosted by a 5 percent jump in accounting software developer Xero .

Investors picked up shares in the fast-growing company after it said on Wednesday that it expected subscriptions for the 2014/15 year to increase by 80 percent, and that it was considering a listing on a U.S. stock exchange.

The news lifted shares from a one-month low hit the previous day.

Also supporting the share market was a signal by the Reserve Bank of New Zealand that it may hold off from raising interest rates in the coming months as it gauges the impact of four rate rises so far this year. (Editing by Christopher Cushing)

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