Australia: Shares boosted by retail sales, earnings optimism

[SYDNEY] Australian shares rose 0.7 per cent on Tuesday led by gains in banks and consumer goods companies after strong retail sales data, while New Zealand's stock market suffered its biggest single-session fall in nearly a month.

Australian retail sales for June jumped 0.7 per cent, beating expectations of 0.5 per cent growth. Retail sales in the previous month grew 0.4 per cent.

The S&P/ASX 200 index rose 41.1 points to 5,720.5 by 0154 GMT, breaching key psychological resistance at 5,700. The benchmark fell 0.35 percent on Monday.

The index turned a corner last month, rising for the first time since February as investors turned to high-yielding bank shares and risk appetite improved on a more upbeat US economic outlook. The benchmark has risen in six of the last 10 sessions. "We started on the front foot today with most sectors in positive territory. There is positivity going into earnings.

There is optimism outside commodities," said Ben Le Brun, market analyst at OptionsXpress.

Suncorp Group, which kicked off the reporting season, hit a 5-1/2 month high after posting a 55.2 per cent rise in full year net profit.

Consumer discretionary shares rose with Harvey Norman up over 7 per cent after a rating upgrade by Credit Suisse. Media companies Fairfax and APN were up about 4 per cent each.

Major banks including National Australia Bank and Commonwealth Bank were up 0.5 to 0.9 per cent. Miners BHP and Rio Tinto were down 1 per cent and 0.4 per cent respectively.

Energy-related shares also fell with Santos down 1.8 per cent and LNG down 4 per cent.

For more individual stocks activity click on Investors will be closely watching the Reserve Bank of Australia policy meeting outcome later in the day, when the RBA is expected to hold its cash rate at the current record-low 2.0 per cent.

New Zealand's NZX50 share index was down 0.9 per cent to 5,904.4 points after a majority stake in Contact Energy went on sale, prompting investors to sell other stocks to free up funds.

Australia's Origin Energy said it was selling its 53 per cent stake in Contact, which was on a trading halt, through a bookbuild at an underwritten price of NZ$4.65 a share, a 7 per cent discount to Contact's closing price on Monday.

Energy stocks bore the brunt of the selling. Meridian Energy , Genesis Energy and Mighty River Power were all down around 3 per cent. The energy utilities sub-index fell 2 per cent.

Other leading stocks were also sold as investors booked profits, notably telecommunications company Spark, down 3.2 per cent.

REUTERS