June 19, 2019 / 7:23 AM / in a month

Australian shares end at best in over 11 years as U.S.-China resuming trade talks

* Mining, energy units gains most on ASX

* Grocer Coles extends gains to end at record high on cost cut plan

* NZ closes at all-time best

* Focus on U.S Fed rate decision (Updates to close)

June 19 (Reuters) - Australian shares ended at their best since the global financial crisis on Wednesday, as investors took heart from the United States and China rekindling trade talks, expectations for lower U.S. interest rates, and the European Central Bank’s surprise dovish tilt.

Australian resource stocks gained the most from U.S. President Donald Trump saying officials from both sides would prepare for his meeting with China’s President Xi Jinping during a G20 summit in Japan next week.

The S&P/ASX 200 index climbed 1.2% to 6,648.1, its highest since December 2007. It had risen 0.6% on Tuesday when Australia’s central bank had pointed to further policy easing in the future.

Australian Prime Minister Scott Morrison will need to secure just three votes in the country’s upper house to pass legislation, with focus on his major re-election policy of A$158 billion in tax cuts for middle-income earners.

China is the biggest buyer of Australia’s resource exports, so metals and mining stocks were the biggest gainers on the day, having added 1.6% to a near 8-year best.

Mining behemoth BHP Group rose 1.9%.

Energy stocks also advanced, with Woodside Petroleum and Santos both gaining over 2%.

The U.S. Federal Reserve’s policymakers wrap up a two day meeting later in the global day. While few analysts expect a rate cut this time, chances of one later, maybe as early as next month, appear high, and investors are waiting to see how dovish the committee’s statement sounds.

Helping the general improvement in risk sentiment, European Central Bank Governor Mario Draghi said on Tuesday the ECB would ease policy again if inflation failed to accelerate. Draghi’s surprising turnaround on easing sparked speculation of a worldwide wave of central bank stimulus.

Financial stocks sub-index, rallied over 1% to its best level in nine months. The country’s “Big Four” banks gained between 0.4% to 1.4%.

In other sectors, Coles Group extended gains to close at a record high after the firm unveiled a A$1 billion cost cutting plan on Tuesday.

New Zealand’s benchmark S&P/NZX 50 index rose 1.1% to 10,304.83, an all-time best.

Fisher & Paykel Healthcare Corporation was the top gainer, having notched 3.2% higher.

Reporting by Devika Syamnath in Bengaluru; Editing by Simon Cameron-Moore

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