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Australia shares extend gains, tracking Wall Street, NZ up

Wednesday, November 23, 2016 - 09:21

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[BENGALURU] Australian shares extended gains on Wednesday hitting a near one-month high, in step with Wall Street where all three main indices hit intraday record highs for a second straight session.

The S&P/ASX 200 index rose 36.16 points, or 0.7 per cent, to 5,449.5 by 0057 GMT.

US stocks extended their post-US election rally overnight with investors seeing President-elect Donald Trump's promises of tax cuts, higher spending on infrastructure and less regulation as beneficial to certain industries, including banking, industrials and healthcare.

"I think the dominant theme for the Australian markets is the return of sentiment to the resources sector and clearly that is driven by the perception of what is going to unfold in the United States", said James McGlew, executive director of corporate stockbroking at Argonaut.

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Gains in the Australian main index were led by financials and materials stocks which were boosted by higher base metal and ore prices.

BHP Billiton Ltd rose as much as 2.3 per cent hitting its highest since Sept 1, 2015, while Rio Tinto Ltd rose as much as 1.7 per cent.

On Tuesday, Reserve Bank of Australia Assistant Governor Christopher Kent said he was optimistic that the fortunes of the country's hard-hit mining states are turning for the better.

The "Big Four" banks were among the top gainers by index points with Commonwealth Bank of Australia touching a three-month high and National Australia Bank hitting a six-month high.

"This market looks like it wants to go up to 5500... I think being long and staying long seems to be the trend for now," said Chris Weston, chief market strategist at IG in Melbourne.

On the other side, healthcare stocks mirrored the trend of their US counterparts, with the sector falling as much as 0.9 per cent.

Biotherapeutics giant CSL Ltd weighed most on the health index, falling more than one per cent.

New Zealand's benchmark S&P/NZX 50 index rose 0.4 per cent, or 26.52 points, to 6,842.91 at 0057 GMT, with gains led by utilities and industrials.

Auckland International Airport rose as much as 2.5 per cent after reporting a rise in October passenger traffic.

The top performer on the index, a2 Milk Company Ltd, surged as much as 7.8 per cent to a nine-month high. The company said on Tuesday that its revenue for first four months of FY2017 jumped 96 per cent and it would adopt a dividend policy after the end of the current financial year.

Energy generator and retailer Contact Energy and Metro Performance Glass jumped more than 2 per cent each.

In contrast, Fisher & Paykel Healthcare Corp fell to its lowest in 10 months, with Deutsche Bank downgrading the stock on concerns over ongoing litigation with ResMed.

REUTERS

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