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Australia: Shares at near 2-yr closing highs, financials support; NZ up
[BENGALURU] Australian shares extended gains to near two-year closing highs on Wednesday, backed by optimism over earnings for the financial sector after the country's big four banks raised their home loan rates recently.
The S&P/ASX 200 index finished at 0.9 per cent higher or 52.26 points to 5873.5, its strongest level since mid-April 2015.
The market started off with a good tailwind from Wall Street's cheer following solid US data showing consumer confidence at a 16-year high.
Financials accounted for most of the gains with big four banks rising between one per cent to 1.3 per cent.
Deutsche Bank analysts on Monday increased their future cash earnings forecasts for the banks by two to three per cent due to the mortgage rate hikes, even though they expected demand for loans from housing investors to decrease as a result.
The positive earnings expectations for the banks appear to have helped feed investor demand.
Fitch Ratings said on Wednesday that the increases in home loan rates should help cool growth in lending to more vulnerable buyers, but added that banks still face risks from high household debt and an overheated property sector, corporate activity was also a focus on the day.
Shares of media company Fairfax Media jumped as much as 7.5 per cent to the highest level since 2011 after the Australian Financial Review reported that US private equity group, TPG Capital, is considering making a takeover offer.
New Zealand's benchmark S&P/NZX 50 index gained nearly one per cent or 68.34 points to finish the session at 7133.57. It marked the highest close in over a week, helped by gains in materials and healthcare stocks.
Air New Zealand rose as much as 3.8 per cent to touch its highest in nearly one year.