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Australia shares up 0.4 pct, solid earnings keep market at 3-mth highs
February 19, 2014 / 1:05 AM / in 4 years

Australia shares up 0.4 pct, solid earnings keep market at 3-mth highs

(Adds analysis, quotes, stocks on the move)

SYDNEY, Feb 19 (Reuters) - Australian shares held at three-month highs on Wednesday morning, with the market adding to recent gains on the back of a string of upbeat earnings reports.

Big-cap banking stocks provided the early momentum, with Commonwealth Bank of Australia up 0.6 percent and Westpac Banking Corp gaining 0.9 percent.

Global miner BHP Billiton Ltd took a breather, easing 0.2 percent following a strong run in the previous session when it reported a solid 31 percent rise in first-half profit.

“With many investors now considering that the fair price for BHP is significantly above (A)$40, it will be interesting to see whether yesterday’s large rally is sustained for a while yet,” Ric Spooner, chief market analyst at CMC Markets said in a note.

Smaller rival Rio Tinto Ltd slipped 0.1 percent, while Fortescue Metals Group climbed 1.6 percent after announcing changes to its dividend reinvestment plan.

The S&P/ASX 200 index added 20.4 points to 5,413.2 by 0102 GMT. The benchmark edged up 0.2 percent on Tuesday.

The market has moved up rapidly on the back of strong earnings over the past two weeks, up nearly 7 percent and is now at levels last seen around the middle of November.

“We’ve had such a terrific run...It doesn’t surprise to have a slight rest,” said John Milroy, an investment adviser at Macquarie Private Wealth.

Brambles Ltd gained 3.0 percent after its first-half underlying net profit rose 11 percent.

Wesfarmers Ltd also reported a 11.2 percent rise in first-half net profit, driven by underpinned by strong retail businesses including Coles supermarkets. But its shares slipped 0.7 percent on the view that the stock is pricey.

“I actually thought the result was very good...(but)they are expensive if you look at multiples, a lot of people need to see some really amazing numbers,” said Even Lucas, market strategist at IG.

Putting a bit of a dampener in the morning session, Suncorp Group Ltd disappointed after posting a 4.5 percent fall in half year net profit on increasing claims. The stock slipped 2.4 percent.

Seek Ltd surged 14.4 percent after posting 65 percent rise in its first-half net profit and announcing an agreement to acquire of JobStreet online businesses.

Elsewhere, Prana Biotechnology Ltd shares jumped 23.5 after the company said its experimental brain disorder drug improved cognitive function in a study on patients with Huntington’s disease.

New Zealand’s benchmark NZX 50 index edged up 0.1 percent to 4,901.3.

Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam

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