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Australia, New Zealand: Shares gain as US-Mexico deal eases trade worries
[BENGALURU] Australian shares climbed on Tuesday, supported by mining and financial stocks following a boost in sentiment after a US-Mexico tariff agreement helped ease broader concerns about global trade tensions.
The S&P/ASX 200 index was on track to gain for a fifth straight session, rising 1.3 per cent or 81.10 points to 6,525.00 by 0205 GMT. The benchmark was closed on Monday for a holiday, but gained 1 per cent on Friday.
Mexico on Friday agreed to step up efforts to curb the flow of Central American migrants across the border, leading to the United States suspending the proposed 5 per cent tariffs on Mexican goods.
The US-Mexico agreement eased concerns that the tariff spat would further depress the global economy, and in turn raised hopes that US President Donald Trump might also seal a deal with China.
"Trump has just made the deal with Mexico which has certainly been a big win for him and it makes a deal with China more likely," said Dale Raynes, associate director at CPS Capital.
Sentiment remained upbeat despite Mr Trump on Monday saying he was ready to impose another round of punitive tariffs on Chinese imports if he cannot make progress in trade talks with China at the G-20 summit later this month.
A jump in China's iron ore prices also boosted miners , with index heavyweights BHP Group, Rio Tinto and Fortescue Metals Group adding between 1.7 per cent and 2.7 per cent.
Financial stocks rose 1.3 per cent and were set for fifth consecutive day of gains, after last week's central bank rate cut. Markets are also pricing in rate cuts by the Federal Reserve this year after the bleak US jobs data released on Friday.
The "Big Four" banks firmed over 1 per cent, with top lender Commonwealth Bank of Australia and Westpac Banking Corp each adding 1.2 per cent.
Vocus Group was the top gainer on the benchmark, advancing up to 13.8 per cent after AGL Energy Ltd revisited its plan to buy the telecom firm with a fresh A$3.02 billion (S$2.9 billion).
AGL stocks, however, declined as much as 6.7 per cent as the company on Friday flagged a seven-month unit outage at a power station in Victoria which would impact its fiscal 2020 earnings.
The gold index bucked the trend, falling 2.6 per cent as bullion prices dropped after a lift in market sentiment drove investors to riskier assets.
Newcrest Mining lost 1.4 per cent and Northern Star Resources slipped 3.9 per cent.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 1 per cent or 101.3 points to 10,128.97.
Dairy products maker a2 Milk Company and Auckland International Airport were the best performers on the index, gaining 3.1 per cent and 2.7 per cent respectively.