Australia: Shares rise on Wall Street rally, Suncorp jumps on A$4.9b ANZ deal

AUSTRALIAN shares ended higher on Monday (Jul 18) as a Wall Street rally on Friday boosted sentiment, while Suncorp Group gained on selling its banking business to Australia and New Zealand Banking Group (ANZ) in a A$4.9 billion billion deal.

The S&P/ASX 200 index closed up 81.5 points, or 1.2 per cent, at 6,687.1, its biggest jump since late June.

The biggest macro force at play was the strong rally in US stocks on Friday, after Citigroup’s earnings beat and steadying iron ore and other commodity prices, said Henry Jennings, a senior analyst and portfolio manager at Marcustoday Financial Newsletter.

The domestic financial sector notched its biggest rise since early June with a 1.4 per cent rise, with 3 out of 4 of Australia’s “Big Four” banks gaining between 1 per cent and 1.9 per cent.

Among the top gainer on the sector index was insurer Suncorp Group, which rose 6.1 per cent on selling its banking business to ANZ for A$4.9 billion (S$4.7 billion).

ANZ also plans on raising A$3.5 billion by way of stock issuance to fund the deal. ANZ’s stock was halted on Monday.

Heavyweight miners rose 2.5 per cent, helped by a rebound in iron ore futures, with BHP Group, Rio Tinto and Fortescue Metals Group gaining between 2.1 per cent and 3.4 per cent.

The country’s energy sector was also boosted 2.2 per cent, with Whitehaven Coal soaring 5.2 per cent on flagging record core earnings for the financial year.

Lynas Rare Earths, the biggest rare earths producer outside China, reported quarterly revenue rising by more than half, but rare-earths oxide production fell sequentially.

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New Zealand stocks closed 41.02 points, or 0.4 per cent higher, at 11,163.63. REUTERS