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Australia: Shares edge closer to 7-year highs
[SYDNEY] Australian shares gave up early losses to edge closer to the psychological level of 6,000 points, led by broad-based gains as investors shrugged off weak earnings reports from resources and energy-related companies.
Sentiment was bouyed as the Dow and S&P500 ended at record highs on Friday after the Greek and euro zone finance ministers reached a deal to extend Greece's financial rescue plan by four months.
The S&P/ASX 200 index rose 0.5 per cent, or 27.76 points, to 5,909.3 points by 0106 GMT. The benchmark fell 0.4 per cent on Friday. The index rose last week to its highest since May 2008.
Analysts expect Australian shares to offer lower or modest returns over the next 12-18 months. The index, which is up over 9 per cent so far this year, is trading at 14.2 times its 12-month forward earnings, higher than its 10-year average.
Financials led the gains on Monday with high dividend-yield stocks such as National Australia Bank and Westpac up about 0.6 per cent. AMP rose 1.7 per cent.
A "very large" futures sell order in the morning had the market fall 0.2 per cent earlier, said Shawn Hickman at Market Matters.
Mining contractors bore the brunt of a resources rout with Macmahon Holdings diving 41 per cent and UGL dropping 15 per cent. Vocation hit an all-time low after flagging writedowns.
Bluescope Steel plummeted over 7 per cent after a weak earnings outlook.
Elsewhere, speciality pet-care retailer Greencross Ltd's shares jumped as much as 10.5 per cent after strong earnings, while Regis Healthcare hit a record high.
New Zealand stocks were flat with the benchmark NZX-50 index a tick higher at 5749.25.
Telecommunications network operator Chorus was up 1.1 per cent at NZ$2.86 as a fall in first half profit matched expectations and it maintained its full year earnings guidance.
Fletcher Building, the market's biggest stock by capitalisation, was up 0.7 per cent to NZ$8.51, as it clawed back some of the 4 per cent slide incurred after it was heavily sold following its first half result.
Accounting software developer Xero maintained its strong run of last week, up 1.5 per cent at NZ$20.00 on modest volumes.
Other major results due this week include national carrier Air New Zealand, power company Mighty River Power and retirement village operator Metlifecare.