July 19, 2018 / 2:34 AM / a month ago

Australian shares rise as financials and materials set the tone; NZ down

* Data shows more jobs were added in June than expected

* BHP extends gain after strong results on Wednesday

* Gold stocks likely to fall for 5th straight session

By Nikhil Nainan

July 19 (Reuters) - Australian shares rose after an initially hesitant start on Thursday, driven by materials and financials as June employment numbers handily beat expectations.

The S&P/ASX 200 index rose 0.4 percent to 6,268.0 by 0200 GMT. The benchmark climbed 0.7 percent on Wednesday.

The Australian economy added more than 50,000 jobs in June, surpassing estimates in a Reuters poll, while the country’s employment rate remained in line, at 5.4 percent.

Many analysts predicted strong data would benefit market sentiment. “To see support come into the market, we need a credible read – 30,000 to 50,000 new jobs - would probably be enough to spark new buying,” said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.

The main financial index mirrored gains on the benchmark, rising 0.5 percent, as investors took in the jobs data.

Investors were hoping for a pick up in employment, which could point to improving wages growth, as concerns over weak property demand have undermined banks, whose business models rely heavily on home loans.

The ‘Big Four’ banks set the tone, rising between 0.3 percent and 0.9 percent, with Australia and New Zealand Banking the biggest boost.

Following record annual iron ore output reported on Wednesday, global miner BHP drove the gains in the mining index, which was up 0.7 percent.

South32 Ltd, made up of non-core assets spun off by BHP, shares were up as much as 2.2 percent after it beat its coking coal output guidance for fiscal 2018, even though fourth quarter output dipped 24 percent.

Gold stocks are set to extend their declines to a fifth session, as a stronger dollar and rising U.S. interest rates have swayed investors away from the traditional safe-heaven.

“Forget all else, the U.S. dollar remains the single dominant factor for gold prices today. Traders are increasing gold shorts despite uncertainty over the trade war, wholly emboldened by the U.S. dollar’s ongoing strength,” said Stephen Innes, head of trading for Asia-Pacific at Oanda.

The gold index dropped about 1.5 percent to its lowest in more than seven weeks as gold prices fell in early Asian trade.

Evolution Mining and Newcrest Mining were the biggest drags, falling 4.1 percent and 1 percent respectively.

New Zealand’s benchmark S&P/NZX 50 index dropped 0.2 percent, or 17.52 points to 8,928.58.

a2 Milk Company was the biggest drag, down as much as 3.2 percent to an over 6 week low.

For more individual stocks activity click on (Reporting by Nikhil Kurian Nainan in Bengaluru, Additional reporting by Mensholong Lepcha)

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