Australia, New Zealand: Shares rebound as Middle East tensions wane

[BENGALURU] Australian shares on Thursday advanced to their highest in a month after US President Donald Trump's tempered response to Iranian missile attacks calmed markets, although a fresh set of attacks kept investors on edge.

US stocks closed higher after Trump said there were no casualties from Iran's Wednesday attack on US forces in Iraq, and added that the United States having military power and equipment did not mean it would have to be used against Iran.

The S&P/ASX 200 index was up 60.30 points or 0.9 per cent at 6,877.9, as of 0026 GMT. Earlier in the session, the index hit its highest since Dec. 2, 2019. The benchmark closed 0.1 per cent weaker on Wednesday.

Investors, however, continued to maintain a cautious stance amid reports of fresh missile attacks. Earlier in the day, two rockets fell inside Baghdad's heavily fortified Green Zone, which houses government buildings and foreign missions.

"It seems tensions may have de-escalated now that Iran's retaliation so far turned out to be measured and caused no US casualties," wrote Stephen Innes, chief Asia market strategist at AxiTrader in a note.

"The markets will likely quickly shrug this off as a lone wolf attack," he added, referring to the fresh attack on the Iraqi capital.

Heavyweight financial stocks tacked on 1.1 per cent, with Commonwealth Bank of Australia and National Australia Bank adding 1.1 per cent each, while Westpac Banking Corp advanced 0.7 per cent.

Healthcare stocks also heaved a sigh of relief with CSL, the fourth-largest stock in the index, putting on 1.4 per cent. Hearing aid maker Cochlear rose 1.7 per cent.

BHP Group, the benchmark's biggest stock, extended gains into a sixth straight session with a 1.2 per cent rise, while rival Rio Tinto added 1.1 per cent.

Iron ore prices inched towards five-month highs on Wednesday, with domestic miners reaping benefits of the rally, amid hopes of strong restocking demand in Chinese mills ahead of local holidays.

The dream run for gold stocks ended, as abating Middle East tensions dampened demand for the safe-haven bullion. Top gold miner Newcrest Mining slipped 2.3 per cent, while Northern Star Resources lost 3.1 per cent.

Smaller miners such as Evolution Mining, Saracen Mineral Holdings and Resolute Mining dropped between 1.6 per cent and 3 per cent.

Also losing favour were energy stocks, which were poised to snap a five-session run of gains after overnight crude prices slipped over 4 per cent.

Heavyweights Woodside Petroleum and Santos gave up about 1 per cent each.

Elsewhere, New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent or 24.15 points to 11,581.13.

Among top gainers was Air New Zealand, which rose 1.9 per cent, benefiting from the tumble in oil prices.

REUTERS