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Australia, NZ: Shares rise, but global jitters undermine gains

Thursday, June 16, 2016 - 12:31
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[MELBOURNE] Australian shares rebounded off a two-month low on Thursday thanks mostly to miners, as the US dollar fell and gold prices rose after the Federal Reserve lowered its economic growth forecasts for this year.

The S&P/ASX 200 index picked up 15.24 points, or 0.3 per cent, to 5,162.30 by 0401 GMT, recouping just a third of Wednesday's losses.

Following five straight sessions of losses, the market opened up strongly but pared early gains in a reminder that it is likely to remain volatile for some time amid uncertainty around US and Chinese growth, Britain's future in the European Union and the US election.

"There's a lot of global issues at the moment. And I think in terms of the investment environment, the fundamentals are deteriorating," said Don Williams, chief investment officer at Platypus Asset Management in Sydney. "It's not only volatility, but earnings growth is getting harder and harder to come across as well," Mr Williams said.

Due to all the jitters, safe-haven gold continued to shine, and gold miners were among the day's biggest gainers.

Northern Star Resources jumped 6 per cent, while other gold miners like Newcrest Mining and Evolution Mining rose between 3 and 6 per cent.

Diversified miners like BHP Billiton and Rio Tinto also benefited from a weaker US dollar and rising metals prices, climbing more than 2 per cent in early trade, then easing off to trade around 0.5 per cent higher.

Crown Resorts shot up 15 per cent after saying it may spin off its international business and some Australian properties into separate listed companies to protect the value of its local holdings from Asian gambling hub Macau's decline.

On the downside, top private health insurer Medibank Private's shares fell as much as 8 per cent after Australia's consumer watchdog took it to court for failing to give members advance notice on a move to limit in-hospital benefits partly out of fear of damaging its IPO in 2014.

New Zealand's benchmark S&P/NZX 50 index edged up 0.2 per cent, or 16.11 points, to 6,885.67.

Air New Zealand rose 2.12 per cent after the airline announced its passenger numbers for May, showing long haul passengers increased 7.5 per cent annually.

Australia and New Zealand Banking Group and Westpac Banking Corp fell more than 1 per cent in New Zealand, while they traded more than 0.5 per cent higher in Australia, as the Aussie dollar fell against the New Zealand dollar.

REUTERS