April 27, 2018 / 3:28 AM / 25 days ago

Australian shares rise on health care; NZ surges

* Aussie shares rise to highest in more than a month

* Health care stocks lead gains in Australia and NZ

* Australian banks lead losses and post a near 1-1/2 year low

* NZ posts biggest intraday pct gain in more than a month

By Aditya Soni

April 27 (Reuters) - Australian shares advanced on Friday, led by health care stocks, after Wall Street finished higher on strong earnings and a drop in U.S. Treasury yields.

The S&P/ASX 200 index rose 0.3 percent or 19.2 points to 5,930 by 0320 GMT. The benchmark declined 0.2 percent on Thursday and was on track to gain about 1 percent for the week.

Christopher Conway, head of research and trading at Australian Stock Report said that the yield on U.S. 10-year Treasuries dipping below the “psychological number” of 3 percent was driving the gains in the market.

The yield on U.S. 10-year Treasuries closed below 3 percent level on Thursday, which coupled with strong quarterly earnings, led to Wall Street’s rally.

Locally, the health care sector was the dominant gainer for a second day in a row and rose to a record high as positive sentiment emanating from a takeover bid for Healthscope continued to spill over to the broader sector.

Biotherapeutics company CSL Ltd climbed 2.3 percent to a record, pushing the index up, while medical device company Cochlear Ltd firmed 2.9 percent to its highest level ever.

Materials added to the gains, with Newcrest Mining Ltd rising about 3.2 percent to a near two-month high, while South32 Ltd climbed 1.5 percent.

Newcrest, Australia’s biggest gold miner, cut its full year production forecast for gold and copper on Thursday. However, Cadia, its most lucrative mine, is expected to return to full production by the middle of this quarter.

Gains on the benchmark were countered by a sharp fall in banks, with the Australian financial index dipping about 0.6 percent to its lowest in nearly 18 months.

“The banks again are struggling and that’s of course due to what’s happening around the Royal Commission,” said Conway, referring to a judicial enquiry into misconduct in the financial services industry.

Australia’s Westpac Banking Corp was forced to defend its mortgage book on Thursday as documents it provided to the commission raised doubts about its quality.

Westpac, the country’s second-biggest bank by market value, fell 0.8 percent to a near two-year low, having dropped 3.6 percent on Thursday. Other “Big Four” banks fell between 0.5-1.5 percent.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index jumped 0.9 percent or 74.20 points to 8,356.25. The benchmark was on track to post a weekly gain of 0.4 percent.

Health care stocks led the upward charge in New Zealand as well, with Fisher & Paykel Healthcare Corporation Ltd rising 2.9 percent, while Ryman Healthcare Ltd firmed 1.7 percent.

Industrials also made gains, with Auckland International Airport Ltd rising 2.1 percent, its biggest intraday percentage gain in about 10 weeks.

The airport operator said earlier that its total passenger numbers rose an annual 8.5 percent in March.

Reporting by Aditya Soni in Bengaluru Editing by Eric Meijer

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