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Australia shares follow Wall St higher, volume light ahead of earnings
February 10, 2014 / 1:00 AM / 4 years ago

Australia shares follow Wall St higher, volume light ahead of earnings

(Adds analysis, quotes, stocks on the move)

SYDNEY, Feb 10 (Reuters) - Australian shares added 0.7 percent on Monday, led by the banks and following a jump on Wall Street, though volumes were low with investors cautious before a batch of corporate earnings reports due later in the week.

Among financials, bluechips Commonwealth Bank of Australia gained 1.1 percent and Westpac Banking Corp added 1 percent. Westpac’s deputy chairman John Curtis said he will retire from the board on April 25.

Mid-tier Bank of Queensland Ltd rose 0.1 percent.

The S&P/ASX 200 index added 37.8 points to 5,204.3 by 0041 GMT. The benchmark rose 0.7 percent on Friday. Trading was light with 141.2 million shares traded by 0042, compared to a moving daily average of 514.9 million shares in January.

Companies due to report later in the week include Telstra Corporation Ltd, Commonwealth Bank of Australia , CSL, and Boral Ltd.

“I don’t think there will be any great surprises in earnings this week,” said Shawn Hickman, managing director at Market Matters in Sydney.

“CBA and Telstra will probably come out, make money and pay good dividends. CBA will be the key to this week because their margins are looking very healthy and their bad debts are looking very healthy.”

Resource stocks also helped underpin the local market as copper rose to post its largest weekly rise for the year, boosted by hopes of a pick-up in demand after the Chinese New Year. Among miners, BHP Billiton Ltd climbed 1 percent and Rio Tinto Ltd added 1.3 percent.

Gold miner Newcrest Mining Ltd jumped 5.1 percent.

A handful of defensives also underpinned the market with telecommunications giant Telstra Corporation Ltd and biotechnology firm CSL Ltd both up 1 percent.

Western Areas jumped 5.3 percent to 3-1/2 month highs of A$2.90 after the company says it expects metrics from earnings including EBITDA margins, EBITDA and net profit after tax to be improved from the prior six months.

G8 Education soared 7 percent to all-time highs of A$3.52 after the company said it has acquired 63 premium childcare and education centres for A$104.7 million.

The benchmark has recovered from 7-week lows hit last week as investors struggled to come to terms with the Reserve Bank of Australia’s decision to drop its easing bias.

“Backing up the strong end to last week with this positive early performance, bullish overtones from international markets have helped kickstart the benchmark index,” said Niall King, a sales trader at CMC markets in a note.

U.S. stocks jumped on Friday, giving the S&P 500 its first weekly gain in four as the impact of a weak reading on the labour market was dulled by harsh weather conditions and traders focused on expectations of further economic strength.

New Zealand’s benchmark NZX 50 index slipped 0.3 percent to 4,828.2.

Reporting by Thuy Ong; Editing by Eric Meijer

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