You are here
Australia shares extend rally on North Korea relief; NZ market scales record high
[SYDNEY] Australian shares extended their rally on Tuesday, supported by strength on Wall Street as investors breathed a sigh of relief following ebbing tensions between the United States and North Korea.
The S&P/ASX 200 index rose 0.7 per cent or 40.39 points to 5,770.8 by 0248 GMT. The benchmark climbed 0.7 per cent on Monday.
US stocks recovered further on Monday after a searing selloff last week, with the S&P 500 scoring its biggest one-day percentage gain since April as concerns about a possible conflict between the United States and North Korea eased.
"Markets do not like uncertainty. Uncertainly equals risk. But what we have seen is a toning down from the American side with regards to North Korea," said James McGlew, executive director of corporate stock broking for Argonaut in Perth.
US officials on Sunday played down the risk of an imminent war with North Korea. Those concerns had helped wipe out nearly US$1 trillion from global equity markets last week.
The positive sentiment on Wall Street spilled over into Australian stocks, with financials driving the gains.
Australia and New Zealand Banking Group was among the top gainers in the financial sector, jumping 1.4 per cent after the country's number four lender said third quarter cash profit rose 5.3 per cent from the previous two quarters.
"Australian banks are all looking at nice increases in ANZ's cash profit. Also, ANZ has made it clear to the market that they are in compliance with their anti-money laundering regulations."
In other banks, Westpac Banking Corp and National Australia Bank were each up one per cent.
Sentiment was also buoyed by comments from the Australian central bank. Minutes from the Reserve Bank of Australia's August policy meeting showed the bank was confident of a pick-up in inflation and jobs, forecasting a couple of years of "above potential" growth in the economy.
CSL Ltd and Telstra Ltd were the other big gainers among blue chip stocks, advancing 1.3 per cent and one per cent respectively.
At the other end, shares of Domino's Pizza Enterprises tumbled as much as 22.7 per cent to a near-two year low after the fast-food chain missed full-year profit expectations due to sluggish sales in Japan and France.
Mining giant Fortescue Metals slipped over 2 per cent, hurt by a more than 4 per cent drop in Chinese iron ore futures on Monday.
New Zealand's benchmark S&P/NZX 50 index rose 0.77 per cent or 59.87 points to 7,821.81.
The index was up as much as 0.81 per cent earlier in the session to hit a record high.
The gains were broad-based with all sectors in the black.
Contact Energy underpinned the gains, jumping as much as 3.6 per cent to scale a more than two-year high.