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Australia, New Zealand shares bounce from recent sell-offs; mood still cautious

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[BENGALURU] Australian shares advanced on Thursday as investors tentatively stepped back into the market thanks to overnight strength on Wall Street, with metals and energy sectors recovering some of their recent losses.

US shares rose on gains as energy and technology shares bounced from a steep sell-off, though traders overall were cautious amid worries about a peak in corporate earnings growth and a slowdown in the global economy.

The S&P/ASX 200 index rose 0.7 per cent or 40 points to 5,682.8 by 0101 GMT, on course to snap a four-session losing streak. The benchmark shed 0.5 per cent on Wednesday.

Investor sentiment was also soothed after Moody's said modest earnings growth in 2019 would benefit Australian corporates.

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The metals and mining index gained 1.1 per cent as base metal prices rose on a softer dollar and higher equities. The sector lost nearly 3 per cent in the previous session.

Sector heavyweights BHP and Rio Tinto Ltd advanced 1 per cent and 0.6 per cent, respectively.

Mining infrastructure services provider Mineral Resources Ltd surged nearly 33 per cent after saying it would sell a 50 per cent stake in its lithium project to Albemarle Corp for US$1.15 billion.

The energy sub-index added 0.6 per cent after touching an eight-month low on Wednesday, as oil prices gained after US government data showed strong demand for refined fuel.

Oil & gas explorer Woodside Petroleum Ltd added 0.8 per cent and Oil Search Ltd rose 0.2 per cent.

Financial shares were also higher, with three of the "Big Four" banks trading in positive territory. The sector has been under heavily selling pressure this year on revelations of misdeeds among major players, with a slowdown in growth further hurting demand.

Commonwealth Bank of Australia rose 0.6 per cent, while Australia and New Zealand Banking Group was up 1 per cent.

In the healthcare sector, drugmaker CSL Ltd was 2.4 per cent up and medical equipment maker and hospital operator Ramsay Health Care Ltd advanced 0.6 per cent.

New Zealand's benchmark S&P/NZX 50 index steadied after seven straight sessions of declines, rising 0.5 per cent or 42.55 points to 8,714.95.

a2 Milk jumped 7 per cent and Synlait Milk Ltd gained 4.7 per cent.

REUTERS