Australia: Shares edge higher ahead of rate decision; New Zealand flat

[BENGALURU] Australian shares inched up on Tuesday, buoyed by financials ahead of the central bank's rate decision, although persisting worries over the economic impact from the coronavirus capped gains.

The S&P/ASX 200 index rose 0.1 per cent or 9.50 points to 6,932.80 by 0050 GMT.

Faced with a slowing economy, the Reserve Bank of Australia reduced rates thrice last year, bringing the cash rate to a record low of 0.75 per cent. The central bank is expected to keep the rate on hold on Tuesday, according to a Reuters poll.

However, economists anticipate at least one rate-cut this year.

"We think if there is a move next, it will be a cut rather than a hike and we're pencilling in April as the date for that," said Steven Daghlian, market analyst at CommSec.

Meanwhile, concerns due to the coronavirus outbreak lingered as the death toll in China jumped to 414 as of Monday.

The fears have also spurred a rise in the chances for a rate cut at Tuesday's meeting from 10 per cent to 20 per cent, Mr Daghlian said.

Financial stocks firmed marginally, with Australia and New Zealand Banking Group rising up to 1.6 per cent.

Gains were capped by an as much as 0.7 per cent fall in Commonwealth Bank of Australia, the country's largest bank.

Shares of Westpac Banking Corp fell as much as 1.5 per cent. The lender was hit with another US class-action lawsuit on Monday over issues with its financial crime monitoring.

Healthcare stocks, considered defensive bets, rose near 1 per cent. Biotherapeutics firm CSL rose 1.2 per cent.

Tracking gains of its peers on Wall Street, technology stocks rose 0.6 per cent, with shares of buy-now pay-later firm Afterpay rising as much as 4.4 per cent to a record high.

The broader gains were capped by a drop in energy stocks, which fell as much as 1.5 per cent to its lowest in over three months due to weaker oil prices.

Top energy firms Woodside Petroleum and Santos Ltd declined 1.2 per cent and 0.9 per cent, respectively.

Weaker iron ore, copper and gold prices dragged materials and mining stocks 0.55 lower.

Heavyweight BHP Group shed 0.9 per cent, while Rio Tinto fell 1 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index edged higher to 11,561.88.

Shares of A2 Milk rose 1 per cent, recovering from an over 2 per cent fall in the previous session. Fonterra Shareholders' Fund dropped more than 1 per cent.

REUTERS