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Australia: Shares rally 1.5% on solid GDP, NZ nears 2-month top

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[SYDNEY] Australian shares rose 1.5 per cent to an eight-day high on Wednesday as investors cheered data showing the domestic economy beat all forecasts to grow at its fastest in almost two years, while New Zealand stocks scaled a near two-month peak.

The S&P/ASX 200 index rose 77.25 points to 4,999.5 points by 0105 GMT, building on a 0.85 per cent gain on Tuesday.

Analysts said the market was drawing support from better than expected GDP figures, giving a boost to sentiment already brightened by upbeat US economic data overnight.

Australia's economy grew an unexpectedly fast 0.6 per cent last quarter as gains in consumer and government spending offset the heavy drag from a global mining downturn.

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Market voices on:

"US financials were the top performing sector in the S&P 500 overnight, and a lot of that bullishness has spilled over to Australia. We have had a strong performance from the banks, which make up 48 per cent of the index market capitalisation," said Angus Nicholson, market analyst, IG Markets.

"After all this, Q4 Australian GDP beat estimates quite significantly, which adds fuel to the bullish view on the Australian economy."

Financials stocks rose 1.3 per cent, leading Australia's benchmark higher. Australia and New Zealand Banking Group rose more than 4 per cent to a near one-month high of US$24.07 a share, while Commonwealth Bank of Australia Ltd, Westpac Banking Corp and National Australia Bank each rose more than 3 per cent.

Energy companies received some support as the price of oil rose 2 per cent on Tuesday, driving Woodside Petroleum Ltd to gains as much as 5 per cent.

Miners Fortescue Metals Group, BHP Billiton Ltd and Rio Tinto Ltd all rallied more than 3 per cent as the price of iron ore firmed.

New Zealand's benchmark S&P/NZX 50 index rose 0.34 per cent, or 20.56 points, to 6,302.29, near the session high of 6,309.88 - the highest since January 5.

Dual listed ANZ Bank and Westpac Bank were the best performing companies.

ANZ said on Wednesday it would break up its global wealth division to focus on improving returns and capital efficiency in insurance and superannuation.

The biggest losers included Sky City, down 1.4 per cent.

REUTERS

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