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Australia: Shares edge up with oil, NZ boosted by rate cut
[SYDNEY] Australian shares inched ahead on Thursday as higher oil prices lifted the energy sector, while the New Zealand market touched a new peak after a surprise cut in domestic interest rates.
The S&P/ASX 200 index added 2 points to 5,159.5. The benchmark bounced almost 1 per cent on Wednesday but stopped short of tough resistance around the week's peak of 5,182.5, which had been the highest reading since early January.
Shares of Australian oil companies rose after US crude hit three-month highs on a big gasoline inventory drawdown and speculation that top producers might agree soon to an output freeze.
The S&P/ASX 200 Energy (GIC) Index rose 1.6 per cent after two sessions of losses. Woodside Petroleum Ltd, Oil Search Ltd and Santos Ltd all made ground.
The mood globally was cautious as markets wait to see what the European Central Bank does at its policy meeting later on Thursday.
Some sort of easing is widely expected, but investors are reluctant to wager on aggressive stimulus given the central bank disappointed so badly back in December.
Perhaps aiming to pre-empt the ECB, New Zealand's central bank cut its cash rate a quarter of a point to an all-time low of 2.25 per cent.
Citing a worrying fall in inflation expectations, the Reserve Bank of New Zealand (RBNZ) also indicated that further cuts might be necessary in the months ahead.
New Zealand's benchmark S&P/NZX 50 index reacted by rising 0.5 per cent to 6,491, having touched a record high at 6,506. The drop in rates made stocks paying dividends look more attractive. "I think the market is very much driven by the surprise rate cut, the currency coming off, yield players in and also any currency players," said Brad Gordon, investment advisor at Macquarie Equities.
Yield stocks such as Spark gained, with the telecoms provider up 1.25 per cent.
Fisher and Paykel Healthcare, whose offshore sales benefit from a lower New Zealand currency, rose 1.1 per cent.
Dual-listed ANZ Bank rose 2.85 per cent as the bank announced it was considering making two offers of unsecured bonds.