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Australia shares rebound, OZ Minerals jumps on production report
January 15, 2014 / 12:36 AM / 4 years ago

Australia shares rebound, OZ Minerals jumps on production report

(Adds analysis, quotes, stocks on the move)

SYDNEY, Jan 15 (Reuters) - Australian shares rose 0.7 percent on Wednesday, recovering from the previous session’s rout as investor sentiment took heart from gains on Wall Street overnight, which rose on better-than-expected retail figures.

The gain in U.S. stocks erased much of the previous session’s steep drop, after an unexpectedly strong December retail sales reading eased concerns about an economic slowdown.

The financial sector underpinned the market with the Big Four banks among the sector’s biggest gainers. Top lender Commonwealth Bank of Australia rose 0.8 percent while Australia and New Zealand Banking Group added 0.9 percent. Mid-tier Bendigo Bank and Adelaide Bank rose 0.6 percent.

The S&P/ASX 200 index rose 33.1 points to 5,245.1 by 0020 GMT, its biggest one-day rise in three weeks. The benchmark fell 1.5 percent on Tuesday, its biggest single day decline in 3-1/2 months.

“The Australian market has been in decline for the past two weeks as liquidity returns to the market,” said Chay Flack, an equities dealer at CMC Markets Stockbroking in a note.

“Christmas generally sees low trade volumes through the market, which can exaggerate price movement in stock.”

Heavyweight miners reversed the previous session’s decline, but gains were capped as metals prices slipped overnight. Top-tier miners BHP Billiton Ltd and Rio Tinto Ltd rose 0.2 percent and 1.4 percent each.

The gold sector declined, with Newcrest Mining Ltd and Regis Resources Ltd losing 4.4 percent and 6.9 percent.

OZ Minerals Ltd, Australia’s third-biggest copper producer, soared 16 percent to A$3.56, a nine-week high after saying it will increase copper and gold production this calendar year after 2013 production came in at the top end of guidance.

“Their quarterly numbers were strong even though the full-year was down,” said Juliana Roadley, market analyst at Commonwealth Securities.

“I think what you’ve seen with them over the last year they have been really turning around their business, they’re not lagging on change.”

Meanwhile, Fortescue Metals Group will pay off $1.64 billion on its bonds in March, up to two years ahead of maturity, cutting debt as fast as possible while iron ore prices remain strong. Shares in Fortescue jumped 4.7 percent.

Elsewhere, defensives rose with consumer staples retailer Wesfarmers Ltd climbing 0.9 percent while Australia’s top communications provider Telstra Corporation Ltd added 0.2 percent.

Coalspur Mines Ltd surged 19.4 percent to seven-month highs of 0.37, continuing its climb after the company said a regulator had closed its hearing relating to its application for approval of its Vista project earlier this week.

New Zealand’s benchmark NZX 50 index rose 0.4 percent to 4,883.1.

Reporting by Thuy Ong; Editing by Eric Meijer

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