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Australia: Banks lead shares higher on policy stimulus, New Zealand rises
[BENGALURU] Australian shares rose on Thursday, led by the banks and outperforming more subdued regional markets as a recent central bank rate cut and other easing measures looked set to support business in the sector.
Australia's S&P/ASX 200 index was 0.6 per cent higher at 6,395.1 by 0150 GMT, having gained 0.4 per cent higher on Wednesday.
Wall Street strengthened overnight but broader Asian shares were cautious on fears a looming US trade war with Mexico would further depress global growth.
Australian financial stocks, which make up the bulk of the main index in market capitalisation terms, extended gains for a third straight session to add as much as 0.8 per cent.
The "big four" banks rose between 0.5 per cent and 1 per cent two days after the Reserve Bank of Australia lowered rates to a record low to prop up a cooling economy and property market downturn.
"APRA (Australian Prudential Regulation Authority) has loosened the borrowing restrictions recently and now we have a rate cut as well. The Federal election is also out of the way. For all those people who were hesitant to borrow money to invest in or buy a property, they have three big reasons to go ahead," said Christopher Conway, senior investment adviser at Marcus Today.
"Debt is now cheaper. The volume of money being borrowed from the banks will increase."
Mr Conway added that Australia and New Zealand Banking and Westpac Banking have protected their net interest margins by not passing on the rate cut fully and this "could encourage some buying back into the sector."
In other banking news, Bank of Queensland named George Frazis, outgoing head of consumer banking at Westpac, as its chief executive and managing director.
Weaker oil prices capped gains on the energy index but Santos powered through to gain as much as 2.6 per cent after the Dorado-2 appraisal well, which it partly owns, confirmed a major oil and gas resource.
Smaller energy peer Carnarvon Petroleum, which owns the rest of the stake, surged as much as 15.7 per cent to a more than nine-month high.
Mining stocks, the second biggest sector on the benchmark, bucked the overall trend to fall as much as 0.6 per cent after copper weakened to a five-month low on Wednesday.
Heavyweight Rio Tinto declined as much as 1.8 per cent while the world's biggest miner BHP Group lost 0.8 per cent. New Zealand's benchmark S&P/NZX 50 index was 0.3 per cent higher at 9,980.68, bolstered by healthcare gains.
Fisher & Paykel Healthcare Corp added as much as 1.8 per cent.