You are here
Australia: Shares edge higher as iron ore rebound stokes hopes
[SYDNEY] Australian shares rose on Monday as a rebound in the iron ore spot price and China's return from holidays encouraged investors to buy across the board.
A media report that mining giant Rio Tinto will embark on a US$5 billion (S$6.67 billion) share buyback added to the upward momentum in thin trade during the Australian summer holiday season. "The volumes are very low, way below average, so any move is exaggerated, on the upside and the downside," Quay Equities managing director David Reynolds said.
After a sluggish lead from Wall St, the S&P/ASX 200 index opened lower before recovering in the early session to be up 0.25 per cent or 13.47 points at 5449.9.
Iron ore player Fortescue Metals Group led resources higher, gaining nearly 2 per cent as the commodity's spot price continued a recent rebound from multi-year lows.
Smaller Atlas Iron jumped 8.7 per cent, the biggest gainer on the market, following a rise in the metal's price. Gold producers Newcrest Mining and Evolution Mining added 3.5 per cent and 6 per cent respectively.
Other metals prices fell, weighing on large players Rio Tinto and BHP Billiton, down 0.2 per cent and 0.4 per cent.
Energy companies were stronger as investors bet they would benefit from a lower Australian dollar despite falls in the commodity's spot price. Oil Search rose 2.5 per cent and oil and gas producer AWE jumped 5 per cent after saying an Indonesia-based project in which it has a stake received government backing.
Banks were mixed, with Australia and New Zealand Banking Group flat while Commonwealth Bank of Australia and National Australia Bank each added 0.2 per cent.
Mining contractor Transfield Services tumbled 4 percent as investors continued selling after Spain's Ferrovial SA quit a takeover proposal last month.
New Zealand's benchmark NZ50 share index edged up 5.2 points or 0.1 per cent to 5,573.56, hovering near a lifetime closing high of 5,577.20 as investors bought shares in blue-chip companies which sold off in late 2014.
New Zealand Oil and Gas rose 3.17 per cent as it shook off an ongoing slide in global oil prices.
Travel-related shares began the new year on a strong note, with Auckland Airport rising 2.6 per cent while Air New Zealand rose 2.4 per cent. The national carrier and New Zealand's largest airport operator continue to benefit from hopes for strong tourism and travel industries in 2015.