You are here

Australia shares bounce on Wall Street, financials lead; NZ stocks up

Tuesday, August 30, 2016 - 11:59
39138584 - 20_07_2016 - AUSTRALIA-STOCKS_.jpg

[BENGALURU] Australian shares bounced on Tuesday, supported by overnight strength on Wall Street and upbeat US consumer spending data, with gains in the financial sector leading the way.

The S&P/ASX 200 index rose 28.2 points, or 0.5 per cent, to 5497.6 by 0245 GMT, after hitting its lowest in over a month in the previous session due to concerns of a near-term US interest rate hike.

But strong US consumer spending, which accounts for more than two-thirds of US economic activity, lifted the mood.

Investors are now turning their attention to US payroll data later on Friday to gauge if the Federal Reserve might be in a position to raise rates before year-end.

"It is basically a relief rally from yesterday," said Mathan Somasundaram, a quantitative strategist with Baillieu Holst.

"We are getting a bit of a bounce from the big four banks. But I would expect that as the day goes by we would probably start selling off again and take some profits and probably end up with a small positive day."

Financials, the biggest constituent on the index, added 0.5 per cent with Commonwealth Bank of Australia and National Australia Bank gaining 0.6 per cent and 0.8 per cent respectively.

The banking sector has been under pressure recently due to slowing earning growth and pressure on margins.

Gains in basic materials were led by Evolution Mining, which was 5.3 per cent higher as gold rebounded from a near five-week low.

Fortescue Metals gained 3.5 per cent on the back of S&P upgrading its rating outlook.

Oil stocks gained as oil futures edged up on a weaker US dollar.

Oil explorer Oil Search Ltd posted a 2 per cent gain.

New Zealand's benchmark S&P/NZX 50 index was 0.24 per cent or 18 points higher at 7385.26.

The rally was led by industrials and utilities with Auckland International Airport heading the gains.

Medical devices maker Fisher & Paykel Corp and electricity generator and supplier Meridian Energy Ltd were among the biggest gainers on the main index.

REUTERS