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Australia, NZ: Shares steady as banks rebound

Friday, February 26, 2016 - 10:37

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[MELBOURNE] Australian and New Zealand shares were steady by midday on Friday, as banks came off their lows, offsetting pressure on mining stocks after iron ore prices sank, and as top grocer Woolworths recouped hefty early losses to shore up the market.

The S&P/ASX 200 index picked up half a point to 4,881.70 by 0144 GMT. However after two torrid days earlier in the week the benchmark was on its way to posting weekly losses in excess of 1 per cent. "We've seen quite a lot of volatility during the session,"said Angus Nicholson, an analyst at broker IG Markets.

The market swung around all day with the banks, which were pummelled earlier in the week.

Mr Nicholson said yield-focused investors should be attracted to the fat 10 per cent yield on the banks at current prices, which should shore up the sector. "Going forward we could start to see steady buying in the banks with that impressive yield in such a low-yield global environment," he said.

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The big four banks were all up by at least 0.3 per cent, with Australia and New Zealand Banking Group leading the way, up 0.9 per cent.

Woolworths Ltd dropped as much as 6.4 per cent to a near 10-year low after its first-half profit before one-offs fell by a third and it warned that supermarket sales would not improve much in the second half. However the stock bounced back to trade up 3.6 per cent.

Top miners BHP Billiton and Rio Tinto both fell after iron ore and copper prices dropped, with BHP down 2.5 per cent and Rio down 3 per cent. Fortescue Metals Group fell nearly 5 per cent.

Energy stocks received no boost from reports that major oil producers plan to meet to discuss freezing output to curb oversupply, with Woodside Petroleum sliding 2.2 per cent and Santos down 0.9 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 2.4 points to 6,227.64. The index was poised for its second week of gains, and at the current level was up about 1.25 per cent on the week.

Sky TV led losses, falling 2.0 per cent after announcing its half-year net profit was down 5.8 per cent.

Air New Zealand lost 1.8 per cent and Fisher & Paykel Healthcare fell 1.7 per cent.

Orion Health Group was the biggest gainer, soaring 11.7 per cent after announcing it signed an agreement with IT services provider Cognizant Group.

REUTERS

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