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Australia: Shares stage modest rebound, New Zealand firmer as well
[SYDNEY] Australian shares staged a half-hearted rebound on Tuesday, with investors remaining cautious as they waited for a fresh Chinese factory survey to gauge the health of the world's second biggest economy.
The S&P/ASX 200 index rose 0.5 per cent, or 27.0 points, to 5,093.2 by 0301 GMT. On Monday, it dropped more than 2 per cent, its third fall of such magnitude this month alone.
Worries about slowing growth in China, Australia's single biggest trading partner, coupled with uncertainty over when the Federal Reserve will hike interest rates have conspired to knock the market lower. China's flash September PMI survey, due on Wednesday, will be closely watched.
Tuesday's price action was all about trimming some of the excessive bearishness seen in the previous session, with many of the beaten-down sectors finding a steadier footing.
"Yesterday, there was almost a buyers' strike out there, that's why the selling got pretty heavy handed. There is just a general pick-up from yesterday's over-reaction," said Evan Lucas, market strategist at IG in Melbourne.
The big four local banks were in better shape with Westpac Banking Corp rising 0.5 per cent, following a near 3-per cent drop on Monday.
Oil and gas producers were also winners thanks to a rally in oil prices overnight. Woodside Petroleum and Santos were both more than 3.0 per cent higher.
For more individual stocks activity, click on New Zealand's benchmark NZX 50 index was slightly firmer, but lacked conviction as diverging interest rate outlooks between New Zealand and the United States weighed on sentiment.
The index was up 0.2 per cent, or 8.6 points, at 5,692.1, with investors taking a breather from a one-month peak touched last week.
The dairy sector again took centre stage with Synlait Milk up more than 3 per cent after the processing firm said it expected lactoferrin sales to nearly double next year. The company reported a drop in annual revenues largely due to declining milk prices and revised down its forecast milk price for the 2015/16 season.
Shares in Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter, touched their highest in four months. On Monday, the cooperative said it would cut jobs and expected payroll savings to offset sharp falls in milk prices. The fund has risen more than 8 per cent this month.