You are here

Australia: Shares rise as oil, gold rebound drive resources up


[SYDNEY]Australian shares shook off a weak lead from Wall Street and recovered some of their recent losses on Tuesday, as rebounding oil and metals prices drove a relief rally in resources firms.

A raft of encouraging domestic economic data, including figures showing new home approvals grew twice as fast as expected in October, added to the positive mood after a punishing selloff in recent sessions. "We're one of only a few markets in positive territory today and it really reflects that high presence of resources stocks,"said CMC Markets chief market strategist Michael McCarthy, noting falls in Japan's Nikkei and Hong Kong's Hang Seng indexes. "We haven't recaptured all of the lost ground, but with the rest of the market also taking a step up, it's a positive day,"added McCarthy.

The S&P/ASX 200 index added 1 per cent or 52 points to 5259.4 by 0142 GMT, clawing back some of the 3.6 per cent it lost in the previous two sessions.

In the US, S&P 500 had its biggest one-day drop in more than a month as economic data indicated weakening global growth.

Gold stocks led miners higher after the metal bounced 4 per cent overnight in its biggest gain in a year, following recent weakness. Newcrest Mining jumped 6.3 per cent, while smaller Northern Star leapt 11 per cent.

Oil producers also rebounded in step with spot prices, with Woodside Petroleum up 3 percent and Santos 2.5 per cent stronger.

Iron ore stocks shrugged off persistent weakness in the commodity's price and rose following recent steep losses. BHP Billiton gained 3 percent and Rio Tinto was up 2 per cent.

Among banks, Westpac Banking Corp rose nearly 1 per cent and Commonwealth Bank of Australia gained 0.5 per cent.

New Zealand's benchmark NZX50 index followed global markets lower, losing 0.4 per cent to 5408.7.

Telco Chorus surged 16.36 per cent after it said its earnings would take a smaller hit if looser broadband pricing controls proposed by a regulator on Tuesday took effect.

Dominant telco Spark fell 2.6 perc ent after saying the proposals would hurt earnings.