Australia, NZ: Shares flat as investors step back

[SYDNEY] Australian and New Zealand shares were flat on Friday as investors in Australia waited for an outcome to Australia's election and traders in New Zealand took a breather from a nine-session rally.

The S&P/ASX 200 index gained 1.18 points to 5,229.1 by 0144 GMT, a rise of 0.2 per cent. The benchmark is down 0.3 per cent for the week, after a rally on Thursday was capped by a credit outlook downgrade from ratings agency Standard and Poor's.

"It's a bit of a low news day, everyone's waiting for the final resolution to the election and what that might mean," said senior analyst Adam Tout at CPS Capital in Perth.

"Bond yields are incredibly low so the market has become a bit risk-averse, I think everyone's just rotating funds towards cash and waiting to see what unfolds. I wouldn't underestimate that a fair bit of Australia is away for school holidays and anecdotally the market does slow down a bit then."

The financial and mining sectors led Australia's bourse higher.

Despite Australia cutting its forecast for iron ore prices, shares in South32 Ltd added 4.26 per cent, BHP Billiton Ltd stock rose 0.31 per cent and Rio Tinto Ltd gained 1.27 per cent.

Whitehaven Coal Ltd stock surged 8.54 per cent after thermal coal prices jumped to 2016 highs this week.

Financial stock CYBG PLC - the holding company which owns Clydesdale Bank and Yorkshire Bank - added 4.99 per cent, although it remains 29.6 per cent below its price before the UK voted to leave the European Union.

Similarly exposed BT Investment Management Ltd Group gained 5.03 per cent, but is likewise down 23.8 per cent since the Brexit referendum result.

New Zealand's benchmark S&P/NZX 50 index was largely flat on Friday as investors took a breather after nine sessions of gains.

The index inched up 0.06 per cent or 4.18 points to 7,011.700 and was headed for its second week of gains, poised to rise 1.23 per cent on the week.

Heartland Bank led gains, rising 1.63 per cent, while telecommunications operator Spark was up 1.37 per cent.

Ports of Tauranga rose 1.22 per cent and Air New Zealand was up 0.93 per cent.

The New Zealand subsidiaries of Australian banks led losses, after Thursday's announcement that S&P had revised its Australian ratings outlook from stable to negative.

Westpac fell 1.57 per cent and ANZ lost 1.15 per cent.

REUTERS