Australia: Shares edge higher but gold stocks cap gains, New Zealand falls

[BENGALURU] Australian shares inched higher on Wednesday, helped by the banking and energy sectors, but gains were checked by a fall in gold stocks on renewed Sino-US trade optimism.

The S&P/ASX 200 index rose 0.1 per cent or 3.2 points to 6,700.3 by 0033 GMT. The benchmark ended 0.2 per cent higher on Tuesday.

Financial stocks rose after the central bank left interest rates unchanged on Tuesday. The "Big Four" banks gained between 0.4 per cent and 0.8 per cent.

The Reserve Bank of Australia held interest rates steady as expected at its policy review, as it gauged the impact of three cuts already delivered this year, while leaving the door ajar for further stimulus if needed.

"There is a lot of talk that with the official cash rate at 0.75 per cent, there is very little room for banks to cut deposit rates any further....so further interest rate cuts would mean margin compression," Michael McCarthy, chief market strategist at CMC Markets said.

The banking sector has come under pressure of late after Australia and New Zealand Banking Group and Westpac Banking Corp reported weaker results due to record low interest rates and tougher competition.

National Australia Bank will report on Thursday, and the country's top lender Commonwealth Bank of Australia the week after.

Energy stocks were poised for a fourth day of gains, boosted by higher oil prices. Oil refiner and retailer Viva Energy Group led gains in the sector with a 1.5 per cent advance, while heavyweight Oil Search traded 1.3 per cent higher.

Gold stocks fell 2.9 per cent, dented by a fall in prices of the safe-haven metal, as increasing optimism over a US-China trade deal spurred investors' appetite for riskier assets.

However, a rally in global equity markets took a breather in early Wednesday, after China pressed US President Donald Trump to remove recently imposed tariffs.

The mining sub-index ticked up 0.1 per cent, tracking strength in copper and iron ore prices. BHP Group, the world's biggest miner added 1.4 per cent, while copper miner OZ Minerals gained 2.6 per cent.

Meanwhile, building materials maker Boral Ltd was among the top drags on the ASX 200, sliiding 3 per cent in its worst day since Aug 26. The company on Wednesday warned of a weaker fiscal 2020 first half amid project delays and a softer housing market.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 0.7 per cent or 78.8 points to 10,762.76.

New Zealand stock exchange operator NZX delayed the opening of markets for almost three hours on Wednesday because of "systems issues" in the derivatives market.

Dairy company a2 Milk slipped 3.7 per cent, while New Zealand Refining Company shed 0.5 per cent.

REUTERS