Australia shares edge up as materials gain; NZ flat

[SYDNEY] Australian shares edged up on Thursday, as robust commodity prices drove up material stocks, offsetting a slump in ex-dividend trading Rio Tinto, while shares of lenders also rose.

The S&P/ASX 200 index edged up 11.54 points, or 0.2 per cent, to 5,777.2 at 0302 GMT. The benchmark rose 0.4 per cent on Wednesday.

Newcrest Mining climbed nearly 3 per cent to its highest in over six weeks and was set for a third straight session of gains, while BHP Billiton inched 0.7 per cent higher.

Gold prices were at a near two-month high on Wednesday after tensions heated up between North Korea and the United States, sending investors scurrying to safe haven assets.

Shares of Rio Tinto fell 2.3 per cent, its biggest drop in a week, as the miner traded ex-dividend.

Financial stocks picked up after a soft start, led by the "Big Four" banks which rose in a range of 0.6 per cent to 0.9 per cent.

"Commodities have been really strong and that's generally positive for our (Australian) currency," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

When the currency moves up, banks are where the global investors tend to get their exposure into the Australian market, he added.

Virgin Australia Holdings Ltd, the country's second-biggest airline, reported a smaller-than-expected annual loss and said its outlook had brightened with a surge in business confidence lifting corporate traffic, driving shares 5.7 per cent higher.

Meanwhile, Australia's biggest life insurer, AMP Ltd fell 3.6 per cent to more than a two-week low after reporting an interim net profit attributable, on a statutory basis, of A$445 million (S$478 million), down from A$523 million reported last year.

Power producer AGL Energy gave up gains accumulated after beating market forecasts of annual underlying profit, to fall 2.9 per cent to its lowest in over a week.

Shares of Woolworths Ltd dipped 0.8 per cent after Australia's antitrust regulator said it was concerned BP Plc's plan to buy the petrol stations of the grocery giant would hurt competition, a sign it may block the A$1.8 billion deal.

New Zealand's benchmark S&P/NZX 50 index rose 3.07 points, or 0.03 per cent, to 7,802.71 at 0302 GMT, after opening marginally lower.

Dairy firm a2 Milk Company rose as much as 2.3 per cent to post a record high, while Meridian Energy Ltd climbed one per cent to its highest in over six weeks.

Spark New Zealand weighed on the index, falling 1.3 per cent, its biggest drop in more than a week.

Elsewhere, the Reserve Bank of New Zealand said it still expected inflation to rise gradually as capacity pressures increase, underwhelming some expectations that it would strike a more dovish tone given recent soft economic data.

REUTERS