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Australia shares rise on positive US sentiment; NZ slightly up
November 29, 2017 / 1:43 AM / in 14 days

Australia shares rise on positive US sentiment; NZ slightly up

Nov 29 (Reuters) - Australian shares rose to their highest in more than 2-1/2 weeks on Wednesday, driven by gains in the financials and resource sectors following a strong lead from Wall Street, which climbed to record highs.

Wall Street surged on Tuesday, led by sharp gains in banking stocks, and boosted by progress for a tax cut bill and strong consumer confidence data.

The S&P financial sector soared 2.6 percent, its biggest daily percentage increase since March 1.

The S&P/ASX 200 index rose 0.7 percent or 39.75 points to 6,024.00 by 0109 GMT. The benchmark fell 0.075 percent on Tuesday. All 10 sectors accumulated gains.

“I think the key driver today is the rally in U.S. markets, which has spelled confidence in our markets,” said Ric Spooner, Chief market strategist at CMC Markets.

Financials led the upward march of the index, with the Australian financial index climbing 0.8 percent to its highest in a week.

Australian banks are responding to the rise in financials in U.S. markets and have also benefited from index-buying in the domestic market, added Spooner.

The financial sector accounts for about 40 percent of the benchmark based on market value.

Heavyweight Commonwealth Bank of Australia rose 1 percent to its highest since Nov. 13, accounting for most of the gains on the benchmark.

Other members of the country’s “Big Four” banks - Westpac Banking Corp, National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd - gained between 0.6 percent to 0.8 percent.

Materials stocks followed closely, rising despite a fall in metals prices as they benefited from the positive investor sentiment in the market.

The positive sentiment from the U.S. is helping materials stay buoyant despite a weakness in commodities prices, said Spooner.

Mining giant BHP climbed 1 percent, while its rival Rio Tinto Ltd rose 0.5 percent.

The utilities sector was the best performing, with Origin Energy Ltd driving most of the gains for a second day in a row.

Origin climbed 2.1 percent to its highest since August 2015 and was on track for its seventh session of gains.

New Zealand’s benchmark S&P/NZX 50 index climbed 0.1 percent or 7.31 points to 8,148.80.

Mercury NZ Ltd and Fletcher Building Ltd accounted for most of the gains, rising rose 1.2 percent and 1 percent, respectively.

Meanwhile, the Reserve Bank of New Zealand said on Wednesday it would ease restrictions on home loans given the recent cooling in the housing market, which is likely to be dampened further by new government policies.

Real estate stocks were also in black, with Precinct Properties New Zealand Ltd gaining 0.8 percent.

Reporting by Aditya Soni in Bengaluru; Editing by Sam Holmes

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