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Australia shares rise to 4-1/2 year high; cyclicals soar
March 6, 2013 / 6:11 AM / 5 years ago

Australia shares rise to 4-1/2 year high; cyclicals soar

(Adds detail, comments)
    SYDNEY, Mar 6 (Reuters) - Australian shares climbed 0.8
percent on Wednesday to a 4 1/2 year high, and looked set to
extend the rally as cyclicals were buoyed by signs of improving
domestic and global growth prospects.
     Investors, who were already upbeat after a record-breaking
night for the Dow Jones Industrial Average, received more
positive news on the local front. Data on Wednesday showed
Australia's economy grew a moderate 0.6 percent last quarter,
with gross domestic product (GDP) just above expectations and
still well ahead of most of the developed world. 
    "The ASX 200 opened on a firmer footing and found a new wave
of buyers after the Q4 GDP print came in-line with expectations
with upward revisions to Q3," said Chris Weston, chief market
analyst at IG Markets.
   The S&P/ASX 200 index finished the day 41.4 points
higher at 5,116.8, the best closing mark since Sept. 1, 2008.
The benchmark rallied 1.3 percent on Tuesday. The market has
enjoyed a bull-run and risen 10 percent so far this year on the
back of a strong earnings season and diminishing fears about the
global growth outlook.
    The positive local data followed China's pledge on Tuesday
of record government spending to boost growth and upbeat U.S.
service sector data, which drove the Dow up 0.89 percent to a
record-closing high at 14,253.77 points, surpassing the peak
seen in 2007.
     "With the Dow having hit an all-time high, traders on the
Australian market did not need a second invitation to join in on
the proceedings," said Tim Waterer, senior trader at CMC
    "The ASX200 surged through 5,100 points with aplomb... all
big name blue chips have had solid outings."
    Cyclical stocks led the gains. Among banks, Westpac Banking
Corp posted the biggest gain in the sector of 1.3
percent to an all-time high of A$31.66. 
     Miners and steel producers, whose earnings cycle is closely
tied to global growth outlook, attracted strong demand. BHP
Billiton Ltd jumped 1.2 percent and Iluka Resources
soared 4.7 percent. 
     Steel producers were firmer with Fortescue Metals Group
 rallying 3.7 percent and Bluescope Steel 
climbing 3.5 percent.
    Oil miners Woodside Petroleum and Oil Search
 were up 1.4 percent and 3.2 percent respectively. Brent
crude broke a five-day losing streak on Tuesday, rising by more
than 1 percent toward $112 a barrel on optimism over Chinese
demand, record-high U.S. equities and North Sea supply
    "We continue to see further gains in Australian shares over
the year ahead," said Shane Oliver, chief economist at AMP
     New Zealand's benchmark NZX 50 index closed the
session 0.7 percent or 28.8 points higher to 4,298.

 (Reporting by Thuy Ong; Editing Shri Navaratnam)

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