December 1, 2016 / 1:25 AM / 3 years ago

Australia shares gain on OPEC deal, materials, energy jump; NZ up

Dec 1 (Reuters) - Australian shares rose on Thursday led by rally in materials and energy stocks after OPEC’s deal to cut production lifted oil prices.

The S&P/ASX 200 index, which gained 2.3 percent in November, rose 0.4 points, or 23.6 points, to 5,464.1 by 0055 GMT.

Oil prices jumped more than 10 percent to the highest in a month after the Organization of the Petroleum Exporting Countries on Wednesday agreed to its first output cut since 2008, aiming to reduce 1.2 million barrels per day (bpd), or over 3 percent, from January.

Australia’s benchmark energy index climbed 7 percent to a one-year high, with all major stocks gaining. Woodside Petroleum hit an over one-year high, and was last up 6 percent, while Santos Ltd touched a two-month high and was trading 12.7 percent higher.

Gains in “commodities linked stocks today on the back of OPEC is what is driving the market higher...the rest of the market is fairly uninspiring,” said Christopher Conway, head of research and trading at Australian Stock Report.

Index heavyweight BHP Billiton helped the index most with a 4.7 percent jump to snap three sessions of losses. Rio Tinto was also among top movers.

“Company like BHP which obviously falls into the materials sector but is the biggest producer of oil in Australia, so that is the reason why you are seeing a big bump in the materials,” Conway said.

The benchmark financial index extended its strong run, with the “Big four” banks up between 0.5 percent and 1.2 percent. The sector got a boost from solid showing in U.S. peers overnight.

Investors are betting U.S. President elect Donald Trump’s policies will benefit stock markets, with expectations of higher spending on infrastructure and simpler regulations in the healthcare and banking industries.

At the other end, real estate stocks took a hit for a second session, after data on Wednesday showed approvals to build new homes sank in October, hinting that the boom in home building might be turning to rubble.

Shopping center company Westfield Corp fell 2.2 percent.

New Zealand’s benchmark S&P/NZX 50 index rose 0.3 percent, or 22.59 points, to 6,919.54, led by materials and consumer staples.

Fletcher Building added as much as 2.6 percent, while a2 Milk Company Ltd hit a nine-month high.

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Reporting by Suhail Hassan Bhat in Bengaluru; Editing by Shri Navaratnam

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