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Australia shares rise on U.S. debt deal, Boral surges on JV
October 17, 2013 / 1:08 AM / in 4 years

Australia shares rise on U.S. debt deal, Boral surges on JV

(Adds analysts comments, stocks on the move)

SYDNEY, Oct 17 (Reuters) - Banking stocks led a modest rise in Australian shares on Thursday morning, as global markets breathed a sigh of relief after the U.S. Senate approved a deal to break a fiscal impasse that brought the world’s biggest economy to the brink of a debt default.

Speaking after the Senate voted to end the fiscal logjam, but before the House of Representatives took a vote, President Barack Obama said the government will reopen immediately after he signs the bill, ending a 16-day shutdown.

The deal will reopen the government through Jan. 15 and raise the debt ceiling until Feb. 7.

“A decision’s gone down to the wire, and very much confirmed traders’ expectations that there was going to be resolution to this deadline,” said City Index market maker and trader Kara Ordway in Sydney.

The S&P/ASX 200 index added 23.2 points to 5,286.1 by 0033 GMT. The benchmark tacked on a modest 0.1 percent on Wednesday.

The positive mood reflected relief in global markets, with Wall Street rallying more than 1 percent on Wednesday.

Still, there was some caution ahead of the House vote on the debt deal.

“In terms of the vote, it will be harder to push through the House of Representatives and that might be slightly more rocky in terms of sentiment this afternoon,” Ordway said.

Australia’s Boral stole the limelight in the morning session.

The building materials maker’s stock jumped 5.3 percent, the biggest one-day surge in nine months, after it announced a $1.6 billion plasterboard joint venture with its U.S. peer USG Corp .

Top lender the Commonwealth Bank of Australia rose 0.6 percent, and National Australia Bank climbed 1.1 percent.

A handful of underwhelming earnings reports capped the broader market’s gains.

Woodside Petroleum Ltd slid 1.3 percent after it reported a 17 percent on-year fall in third quarter production due to maintenance work and unplanned outages.

Newcrest Mining, the biggest gold miner on the ASX, lost 0.7 percent after it warned that it faced a tax hit as it had to trim deductions taken in previous years.

Ten Network Holdings Ltd fell 1.7 percent after it reported a worse net loss for the 2013 fiscal year and proposed a new financing plan.

Fortescue Metals Group Ltd, which is expected to report its September-quarter production figures later on the day, reversed earlier gains and fell 1.1 percent.

New Zealand’s benchmark NZX 50 index gained 0.4 percent to 4,777.9.

Reporting By Maggie Lu Yueyang and Thuy Ong; Editing by Shri Navaratnam

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