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Australia: Shares rise 1%, investors eye US healthcare vote

Friday, March 24, 2017 - 10:12

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[BENGALURU] Australian shares posted their biggest intra-day gain in more than three weeks on Friday, led by financials and healthcare stocks and clawing back this week's earlier losses, as investors eyed the possibility of an imminent US healthcare vote.

The market has continued to recover from the 90-point fall on Wednesday, which followed the Trump administration's struggles to push through the healthcare overhaul, seen by investors as a sign he may also face setbacks delivering promised corporate tax cuts.

The S&P/ASX 200 index rose 1 per cent, or 56.85 points to 5,764.80 by 0108 GMT. "We are seeing a bit of oversold price recovery coming into Australian market today," said Gary Burton, analyst at IG Markets.

The effect of the US healthcare bill delay initially weighed on Australian stocks but news of a vote later on Friday helped stocks stage a recovery, Mr Burton said.

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The US House of Representatives had been scheduled to vote on the bill on Thursday, but leaders put off the vote after failing to find enough support among Republicans to pass it.

The healthcare index rose 1.4 per cent, while financials index was up 1.4 per cent.

Australia's biggest pharma company by market capitalisation, CSL Ltd rose 1.7 per cent, while shares of Cochlear Ltd gained 1.4 per cent.

Australia's "big four" banks rose between 0.9 per cent to 1.5 per cent.

Iron ore miner Fortescue Metals rose 1.5 per cent after it said it will pay down a US$1 billion term loan, reducing its debt to US$3.6 billion.

Shares of BHP Billiton rose 0.8 per cent.

The strike at Chile's Escondida, which is operated by BHP, is ending after workers decided to invoke a rarely used legal provision that allows them to extend their old contract, the union said on Thursday.

Meanwhile, gold stocks lost some shine, with the Aussie gold index shedding 1.4 per cent.

Evolution Mining lost 4.2 per cent and Newcrest Mining fell 0.4 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent or 10.58 points at 7,073.13.

Healthcare and industrials stocks led the index, with Fisher & Paykel Healthcare Corp gaining 1.1 per cent while Auckland International Airport Ltd rose 0.9 per cent.

REUTERS

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