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Australia: Shares up, set for best week in a month on firmer financials

Friday, July 14, 2017 - 11:38

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[BENGALURU] Australian shares posted broadbased gains for a second straight session on Friday, and were on track for their best weekly performance in a month, as financials tracked their Wall Street counterparts higher ahead of big US banks earnings.

The S&P/ASX 200 index was 0.5 per cent, or 27.37 points, higher at 5,763.70 by 0235 GMT after a 1.1 per cent rise on Thursday. The benchmark has added over 1 per cent so far this week, heading toward its strongest weekly rise since the week ended June 16.

The day's gains rode on a solid rise in energy and financial stocks, with the Australian energy index on track to record its best trading day since early May with a 2.4 per cent rise.

Aussie energy sector bellwether Woodside Petroleum, an oil and gas explorer, climbed 2.1 per cent boosted by overnight advances in oil prices, which came on the back of data showing stronger Chinese demand for crude.

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Smaller rivals Oil Search and Santos rose about 1.7 per cent each.

Origin Energy, which has significant natural gas interests, was also helped by the rise in oil, gaining 2.7 per cent and thereby single-handedly pushing up the utilities sector.

The Australian financial index followed US financials higher as investors bought in before second quarter earnings kicked-off with three of the biggest US banks reporting results. "Our markets are looking ahead to the reporting (earnings)from the US with a degree of optimism," said Tony Farnham, an economist with Patersons Securities.

A Reuters survey showed second-quarter earnings for S&P 500 companies rose 7.8 per cent from a year ago, with financials projected to have had the third-best profit growth among sectors.

The Aussie big banks rose in a range of 0.7 per cent to 1.2 per cent and were the biggest contributors to overall gains.

Meanwhile, the second leg of US Federal Reserve chief Janet Yellen's testimony, this time before a Senate panel, further buttressed her advocacy of a gradual rate of policy tightening.

Investors have seen Yellen's dovish tone as a green light for riskier trades on Wall Street.

New Zealand's benchmark S&P/NZX 50 index added 0.3 per cent or 23.24 points to 7,634.13, and was on track for a fifth straight week of increases.

Gains were concentrated in consumer, utilities and financial shares with dairy products maker a2 Milk and energy retail business Mercury NZ Ltd the biggest advancers on the benchmark, up 1.5 per cent and 3.3 per cent, respectively.

REUTERS

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