You are here

Australia shares extend gains on upbeat bank stocks, NZ slips

Thursday, July 20, 2017 - 11:06

ASX.jpg

[SYDNEY] Australian shares extended their rally on Thursday, led by robust bank stocks as positive sentiment spilled over from another record day on Wall Street.

The S&P/ASX 200 index was up 33.07 points, or 0.6 per cent, to 5,765.2 by 0211 GMT. The benchmark rose 0.8 per cent on Wednesday.

Financial stocks were on a tear, accounting for over three quarters of the rise in the benchmark. The 'Big Four' banks dominated, advancing by about 0.9 to 2.7 per cent.

The Australian Prudential Regulation Authority (APRA) said on Wednesday that banks would be required to raise common equity Tier 1 ratio, a key gauge of a lender's strength, to at least 10.5 per cent by January 2020.

sentifi.com

Market voices on:

"The APRA's capital requirements for banks weren't as high as people thought and we also had a positive lead from Wall Street overnight," said Christopher Conway, head of research and trading at the Australian Stock Report.

"I think this is one of those days where we end up 50 or 60 points higher as there are more drivers in the market at the moment. The positive sentiment around banks will probably dry up and there's not going to be another big push," Mr Conway said.

Oil and gas majors Santos Ltd and Woodside Petroleum led upbeat energy stocks.

Santos jumped about 8 per cent at one point, its highest intra-day leap in 33 weeks, after it reported a 30 per cent rise in sales revenue for the quarter, while Woodside rose a little over one per cent despite posting a drop in quarterly output.

Oil prices climbed nearly 2 per cent overnight to a six-week peak on a surprising drop in distillate inventories.

On Wall Street, the three major US indexes hit record highs as technology stocks surpassed the dot-com era record.

Bucking the trend, diversified miner South32 edged 2.5 per cent lower, as the biggest drag on the bourse. The miner reported a slump in quarterly coking coal production.

New Zealand's benchmark S&P/NZX 50 index fell 32.64 points, or 0.4 per cent, to 5,765 at 0211 GMT.

The bourse was pulled into the red by material stocks, led by Fletcher Building. Its shares fell as much as 8.8 per cent to its lowest in over a year after it said chief executive Mark Adamson was stepping down and it was cutting its earnings guidance for the second time in four months.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom