Australia: Shares rise on Sino-US 'phase one' trade deal; New Zealand falls

[BENGALURU] Australian shares rose on Friday, with metals and mining stocks jumping to a four-month high, after sources said the United States and China reached a "phase one" trade deal in principle.

The S&P/ASX 200 index gained 0.4 per cent, or 29.70 points, to 6,738 by 0058 GMT. The benchmark fell 0.7 per cent in the previous session, but was on track to end higher for the week.

"Risk assets have predictably surged, and those investors who were holding on to trade deal premiums were hugely rewarded for their patience as Dec 15 hedges unwound, and negative equity market bets are getting stopped into trades," said Stephen Innes, chief Asia market strategist at AxiTrader.

While the US agreed to reduce some tariffs on Chinese goods and delay a tranche of Dec 15 tariffs, China also has agreed to make US$50 billion in agricultural purchases in 2020 as part of the deal, sources told Reuters.

The metals and mining stocks gained as a trade deal would help provide relief to top metals consumer China's slackening growth. The sub-index was on track for a 4 per cent weekly gain, the highest since mid-June.

Global mining giants BHP Group and Rio Tinto jumped 2p and 1.6 per cent, respectively. Iron ore miner Fortescue Metals Group gained as much as 2.8 per cent, its highest since July 2008.

Financials added 1.3 per cent, with three of the country's "Big Four" banks rising between 1.5 per cent and 2.2 per cent.

The country's biggest lender Commonwealth Bank of Australia, however, recorded limited gains of 0.3 per cent after it flagged additional payments to underpaid employees.

The energy sub-index was buoyed by Woodside Petroleum and Santos, adding 0.7 per cent and 0.9 per cent, respectively.

Oil prices had risen overnight on hopes that the trade deal would ease concerns over the global crude demand.

Lynas Corp jumped as much as 6.8 per cent after it said it would submit a compliant tender in response to the US Department of Defence's call for proposals to build a heavy rare earths separation plant in the United States.

However, gold miners tumbled 2.4 per cent as the safe haven metal lost its shine after risk sentiment improved.

Sector heavyweight Newcrest Mining lost 1.8 per cent, and Evolution Mining fell 3.9 per cent.

New Zealand's benchmark S&P/NZX 50 index fell 0.5 per cent, or 53.71 points, to 11,254.27.

Manufacturing activity in the country expanded at a slower pace in November, a survey showed on Friday.

Fuel retailer Z Energy plunged up to 17.3 per cent and was the worst performer on the bourse after cutting annual earnings outlook citing low refining margins.

REUTERS