February 12, 2020 / 6:18 AM / 5 days ago

Australia shares rise on solid corporate earnings; NZ rises

(Updates to close)

By Soumyajit Saha

Feb 12 (Reuters) - Australian shares ended higher on Wednesday, powered by gains in top two companies by market value on the benchmark after their strong half-year results, with a drop in new coronavirus cases in China adding to sentiment.

The S&P/ASX 200 index ended 0.5% higher at 7,088.2 at the end of trade on Wednesday, after rising 0.6% on Tuesday.

Shares of Commonwealth Bank of Australia, the country’s top lender, closed at a nearly five-year high as it posted a better-than-expected half-year profit and said it was looking to return capital to shareholders.

The bank’s gains helped the financial subindex rise over 1.8%, contributing the most to the benchmark index’s winnings.

Index heavyweight CSL Ltd hit a record high close after posting an 8% rise in first-half earnings and raising its full-year profit forecast.

Broader healthcare stocks also benefited from CSL’s surge to end 0.4% higher.

Meanwhile, the country’s biggest trading partner China reported its lowest number of new coronavirus cases since late January, lending credence to a prediction from the country’s senior medical adviser that the outbreak could be over by April.

Miners were lower, with heavyweight Rio Tinto closing over 1% lower as brokerage RBC downgraded the company’s shares and forecasted per share profit to fall by 47% between 2019 and 2022.

RBC said a potential shock to demand from the coronavirus could hurt commodity prices.

New Zealand’s benchmark S&P/NZX 50 index closed 0.5% higher at 11,898.24, after hitting a record high during the session.

The country’s central bank held the official cash rate at 1% and said it expects the negative impact of the coronavirus outbreak on the economy to be limited to the first half. (Reporting by Soumyajit Saha in Bengaluru; Editing by Arun Koyyur)

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