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Australia: Shares buoyed by global sentiment ahead of Fed decision

Wednesday, September 16, 2015 - 10:12
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Australian shares rose 1.3 per cent on Wednesday, reversing losses from the previous session, on broad-based gains across all sectors after US shares rallied ahead of the highly anticipated Federal Reserve rate verdict.

[SYDNEY] Australian shares rose 1.3 per cent on Wednesday, reversing losses from the previous session, on broad-based gains across all sectors after US shares rallied ahead of the highly anticipated Federal Reserve rate verdict.

The S&P/ASX 200 index jumped 60 points to 5,078.8 by 0114 GMT. The benchmark tumbled 1.5 per cent to a three-week low on Tuesday.

Despite Monday's gains, the index is still down nearly 6 percent this year so far and is trading near mid-2013 levels. It is on track for another monthly loss after its biggest decline since late 2008 in August.

Recent volatility in shares globally has unsettled investors as concerns about a global slowdown in the wake of China's market turmoil continue to weigh on sentiment, compounded by uncertainty around whether the US Fed will raise interest rates for the first time in nearly a decade at its policy meeting on Sept. 16-17. "The market still remains highly volatile but it's nice to that it has clawed back losses from yesterday," said Ben Le Brun, market analyst at OptionsXpress. "We are going to see very light trading up until Friday morning and then Asian markets will be the first to react." Major banks led the rally on Wednesday with Commonwealth Bank and National Australia Bank up 1.9 per cent and Westpac rising more than 2 per cent.

Major miners BHP Billiton and Rio Tinto were up 1.6 and 0.8 per cent respectively.

Media companies rallied for a second straight day on hopes of media deregulation under new Prime Minister Malcolm Turnbull.

Ten Network, Nine Entertainment and Seven West Media were among top performers on the index rising 3.6-5.6 per cent.

New Zealand's benchmark NZX50 share index rose 15.6 points or 0.3 per cent to 5,668.06, supported by gains in utilities and healthcare shares Meridian Energy rose 1.4 per cent to a two-week high of NZ$2.23, while infrastructure investor Infratil rose 1.3 per cent. Fisher and Paykel Healthcare rose 0.9 per cent.

Further gains were limited by a 2 per cent slide in SkyCity Entertainment.

US shares jumped over one percent overnight though price action is likely to have been exaggerated by low trading volume ahead of the Fed's policy verdict on Thursday.

REUTERS