Australia, New Zealand: Shares rise on hopes of more China stimulus

[BENGALURU] Australian shares tracked broader Asia higher on Wednesday as hopes grew that China would take more steps to limit the economic impact of the coronavirus outbreak that has killed nearly 500 people.

The S&P/ASX 200 index rose 0.4 per cent or 26.90 points to 6,975.60 by 0201 GMT.

China is readying more measures to stabilise its economy, which includes an additional trimming of some key lending rates in the coming weeks along with the hundreds of billions of dollars it has already infused in the financial system.

The death toll passed 490 on Wednesday, as two US airlines suspended flights to Hong Kong following the first fatality there, while Macau urged casinos to shut their doors.

"The shutdowns in China covers a fare chunk of their GDP growth and if the shutdown continues ... into a second or third month it will have a further impact on their growth which will have direct influence on our market," Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities said.

Domestic markets are in a holding pattern ahead of corporate earnings expected over the next few weeks, he said.

Financial stocks gained 0.3 per cent, with shares of Australia and New Zealand Banking Group rising 0.3 per cent. National Australia Bank gained 0.6 per cent.

Material stocks climbed 0.7 per cent as a recovery in copper prices helped the index.

Heavyweight miners BHP Group and Rio Tinto rose as much as 1.3 per cent and 0.8 per cent, respectively.

Elsewhere, Australian mining services provider Perenti Global said it was considering buying Downer EDI's mining servicing business. Shares of the two companies rose 6 per cent and 2.6 per cent, respectively.

Healthcare stocks rose as much as 1.9 per cent, scaling a record high, with shares of biotherapeutics firm CSL boosting gains with an up to 2.5 per cent gain.

Gold stocks were among the only losers on the benchmark, with Australia's largest independent gold miner Newcrest Mining declining as much as 2.7 per cent.

Overnight spot gold prices fell 1.6 per cent as China's stimulus measures drove investors back to riskier assets.

New Zealand's benchmark S&P/NZX 50 index rose 0.5 per cent or 60.69 points to 11,572.18.

Fletcher Building and Fonterra Shareholders' fund gained 1.1 per cent and 0.8 per cent, respectively.

New Zealand's unemployment rate fell in the final quarter of 2019, but jobs growth softened in a mixed bag of labour data released on Wednesday that cemented a view the central bank will stand pat on rates next week.

REUTERS