Australia, New Zealand: Shares flat as investors await Sino-US trade talk developments

[BENGALURU] Australian shares traded sideways on Friday as investors waited to see if trade negotiators from China and US meeting in Washington for a second and final day could salvage a deal to end their countries near year-long tariff war.

The S&P/ASX 200 index was flat at 6,296.8 by 0125 GMT. The benchmark rose 0.4 per cent on Thursday.

Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday. Officials did not speak to reporters as they left the talks.

"I think the markets will be aimless in the short term. It will be a holding pattern till we get clarity on the trade war and we have the federal election next week. I don't think people will take big bets going into the weekend," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Australians will go to the polls on May 18, in an election where the main issues include taxation, climate change and inequality.

Opinion polls have had center-left Labor well ahead and show that the coalition of Prime Minister Scott Morrison's Liberals and the rural-focused Nationals party are headed for a resounding defeat.

A 1 per cent gain in the Aussie energy subindex was boosted by shares of Woodside Petroleum and Santos rising 1.4 per cent and 1.2 per cent, respectively.

U.S. oil prices rose on Friday on renewed optimism that a trade deal between Washington and Beijing could be struck, as investors have been fearing that a protracted tariff war would harm global economic growth.

Metal and mining stocks climbed 0.5 per cent. Top miner BHP Group gained 0.1 per cent, while peer Rio Tinto rose 1.2 per cent.

Separately, shares of smaller miner Aurelia Metals gained 2.3 per cent after it said on Thursday that it was no longer in talks about a possible acquisition of the CSA mine in New South Wales, backing off from plans to buy the Glencore Plcowned copper mine.

Losses were broad based with the financial index slipping 0.3 per cent. The top banks Commonwealth Bank of Australia and Australia and New Zealand Banking Group logged a 0.2 per cent and 0.6 per cent decline.

The country's central bank on Friday indicated that it will consider lowering interest rates if unemployment does not fall further, but downgraded its forecasts for both growth and inflation.

Healthcare stocks also dipped 0.3 per cent with biotherapeutics company CSL shedding 0.6 per cent.

New Zealand's benchmark S&P/NZX 50 index was little changed rising 0.02 per cent or 2.13 points to 10,106.22.

Shares of Auckland International Airport gained more than 1 percent, while NZ-listed shares of A2 Milk Company dropped 0.8 per cent.

REUTERS