Australia: Shares up as Fed rate hike worries abate; NZ rises to over 1-week high

[SYDNEY] Australian shares snapped three straight sessions of losses on Monday as underwhelming US jobs data diminished the chances of a Federal Reserve rate rise in September. Basic materials and oil stocks rallied.

The S&P/ASX 200 index added 52.9 points, or 1 per cent, at 5425.8 by 0305 GMT. The benchmark shed 2.6 per cent last week.

US nonfarm payrolls rose by 151,000 jobs in August after an upwardly revised 275,000 increase in July, the Labor Department said. Economists polled by Reuters had forecast payrolls rising 180,000 last month.

Data on Thursday showing the US manufacturing sector had contracted in August for the first time in six months had already raised doubts about the probability of a rate hike at the Fed's Sept 20-21 policy meeting.

"Well it is very unlikely that they'll hike rates in September," said Angus Nicholson, a market analyst at IG Markets. "A December move would be Fed's best case scenario. Markets are already pricing in a slightly above 50 per cent probability for that."

On Friday markets priced in a 21 per cent chance of a Fed interest rate increase this month, down from 24 per cent the previous day, according to CME Group's FedWatch program.

US markets were closed for Labor Day.

Energy stocks gained substantially on oil rising nearly 3 per cent on Friday before edging down on Monday in Asia, paring some of the gains.

Oil explorer Woodside Petroleum, which entered into an agreement with BHP Billiton to acquire half BHP Billiton's gas assets in the Scarborough area, rose 1.2 per cent.

Oil and gas producer Santos Ltd was 3.3 per cent higher.

Basic materials led the rally with mining heavyweights BHP Billiton Ltd and Rio Tinto Ltd adding 2.4 per cent and 1.2 per cent respectively.

Gold stocks posted solid gains as the metal rose more than 1 per cent on Friday. Spot gold was mostly unchanged at US$1,324 per ounce.

Gold miners Evolution Mining and Northern Star Resources were up 5.1 per cent and 3.4 per cent respectively.

Financial stocks gained as the "Big Four" banks rose in the range of 1.4 per cent to 1.7 per cent.

New Zealand's benchmark S&P/NZX 50 index was up 0.4 per cent, or 31.5 points, highest since Aug 24 at 7457.1.

The rally was led by financials and industrials, with Auckland International Airport up 0.8 per cent and Air New Zealand 2.6 per cent higher.

Comvita Ltd was the biggest gainer on the benchmark 4 per cent higher. The beauty-product maker earlier announced a distribution joint-venture in China.

REUTERS