Australia: Shares rise, NZ stocks hit record high on upbeat outlook

[SYDNEY] Australian and New Zealand shares rose around 0.3 per cent on Thursday, underpinned by financials and consumer stocks, as investors shrugged off the US Federal Reserve's widely expected ending of its stimulus programme.

The S&P/ASX 200 index was up 19.82 points or 0.3 per cent by 02:13 GMT, having touched a seven-week high of 5,481.6 points Wednesday.

The Fed said after a two-day policy meeting it will end its quantitative easing programme of bond purchases and also expressed confidence in US economic prospects.

Investors warmed to Coca-Cola Amatil after parent company Coca-Cola Co announced it would help its underperforming Australian affiliate by taking a minority stake in a struggling Indonesian unit for US$500 million. Coca-Cola Amatil shares rose half a cent to a two-month peak of A$9.25.

Financials sector stocks also pulled the market higher even though National Australia Bank (NAB) reported a second profit drop in three years. "NAB results have presented no shocks. The bank is looking at ways to exit its UK business which is widely seen as its problem area by the market," said Tristan K'Nell, head of trading at Quay Equities.

NAB shares rose 0.2 per cent to A$34.57. Its three major rivals were also up.

Australia's "Big Four" banks are highly profitable and are lauded by investors for their strong returns and lofty dividends. For the recently-ended financial year, they are expected to together post profits of nearly A$30 billion.

The mining sector was weaker as commodities prices remained under pressure. Rio Tinto Ltd slipped 0.7 per cent to A$59.24 and BHP Billiton eased 0.4 per cent to A$33.64.

Elsewhere, the Australian government said it will sell A$1.5 billion (US$1.32 billion) worth of shares in health insurer Medibank Private to retail brokers in Australia and New Zealand, far less than the A$12 billion worth of stock they applied for in the listing.

The planned US$5 billion privatisation of Australia's biggest health insurer opened this week and will close next month.

The New Zealand stock market set a record high with positive company earnings' outlooks supporting sentiment. The benchmark NZX-50 index hit a record 5,381.71, before easing a shade to trade up 0.2 per cent.

The market was helped by the Reserve Bank of New Zealand (RBNZ)'s decision to hold interest rates for the foreseeable future and largely positive assessment of the local economy.

Small and mid-cap stocks fared best, with transport and logistics company Freightways surging 6.8 per cent to a record NZ$5.50 as it reported a sharp lift in first quarter earnings.

Power and gas network operator Vector rose 2.6 per cent to NZ$2.72 despite the competition regulator indicating it wants to impose stricter controls on the returns from assets for regulated utilities.

Software developer Xero slipped a further 2.5 per cent to a one week low of NZ$15.78 following news its sales manager in Britain was poached by a rival.

REUTERS