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Australia: Shares rise as investors catch up with Wall Street; NZ flat

Friday, January 27, 2017 - 10:20

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[BENGALURU] Financial shares led gains on the Australian stock market on Friday as trading resumed after a holiday, while materials were dragged down by lower base metal and gold prices.

As the market was closed for Australia Day on Thursday, investors played catch-up after the Dow Jones Industrial Average topped 20,000 for the first time on Wednesday.

The S&P/ASX 200 index was up 0.7 per cent, or 38.786 points, to 5,710.3 at 0159 GMT, and was on track to rise 1 per cent for the week - which would be its first advance in three weeks. "We are catching up with that respectable rally of Wall Street," said Paterson Securities economist Tony Farnham.

Wall Street held steady on Thursday.

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Market voices on:

Australia's financial stocks have rallied since Donald Trump's election victory, with investors betting fiscal stimulus and deregulation will trigger inflation and stoke a rise in interest rates.

The financial index gained as much as 1.6 per cent, with the "Big Four" banks leading gains. "Combination of local investors less nervous about the outlook for banks... and offshore interests from a currency perspective who have to find some way to invest those funds is pushing up local financials," Mr Farnham said.

Westpac Banking Corp rose as much as 2.0 per cent, and National Australia Bank Ltd was up 2.5 per cent.

Gold stocks lost as much as 6.0 percent to hit their lowest since Jan 5, as a strengthening dollar and improving appetite for risk assets dragged it to a two-week low.

Newcrest Mining, Northern Star Resources and Evolution Mining were among the worst performers.

Miners also suffered from declines in most base metal prices, especially copper. BHP Billiton shed more than 2 per cent. "People are worried about what is happening with global trade, particularly with Mexico, and what could potentially happen to China," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

The White House on Thursday floated the idea of a border tax on goods from Mexico to pay for a wall on the US border, deepening tensions between the neighbours.

New Zealand's benchmark S&P/NZX 50 index was flat at 7,114.33 at 0159 GMT, with utilities and healthcare offsetting gains in telecom and industrials. The index is on track to rise for the sixth straight week.

Contact Energy fell to an over 16-week low after posting a decline in December monthly sales.

REUTERS

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