You are here

Australia: Shares edge up buoyed by miners, energy firms


[BENGALURU] Australian shares inched up on Monday as stronger resource prices supported energy and mining stocks, but expectations for a smaller-than-expected US rate cut curbed investor optimism.

The S&P/ASX 200 index edged up 0.1 per cent to 6,706.80 by 0138 GMT, after gaining 0.8 per cent on Friday.

"Global equity markets continue to have their ups and down based on the perceived degree of accommodative central bank policy," said Stephen Innes, managing partner at Vanguard Markets.

With tensions in the Middle East escalating after the Iranian military seized a British oil tanker late last week, oil prices climbed on supply concerns.

Woodside Petroleum added up to 1 per cent, while peer Oil Search gained 2.3 per cent, giving the energy sector a boost.

Persistent strength in iron ore prices also saw mining giants BHP Group and Rio Tinto add as much as 1.2 per cent and 0.6 per cent, respectively.

Fortescue Metals Group rose 2 per cent ahead of its quarterly output results due on Thursday.

The resource sector is hoping that a slowdown in China's economy could be halted by more stimulative policies as the country is Australia's largest importer of raw materials.

China's central bank is likely to introduce more fiscal spending and liquidity infusions in the coming months to shore up its slowing economy, but sees more aggressive action like interest rate cuts as a last resort, Reuters sources said.

Financial stocks opened lower but were inching higher by 0138 GMT, with Westpac Banking Corp gaining 0.2 per cent and Commonwealth Bank of Australia down 0.2 per cent.

Investors were cautious as US stocks fell on Friday after a Wall Street Journal report indicated that while the central bank was ready for a quarter-basis point reduction in key rates at its July 30-31 meeting, it was not prepared to make a bigger 50-basis point cut. The healthcare index fell as much as 1.3 per cent with drug maker CSL losing 1.5 per cent and medical devices developer Cochlear retreating 1.2 per cent.

New Zealand's benchmark S&P/NZX 50 index was up 0.2 per cent to 10,774.82 and was set for a fourth straight session of gains.

a2 Milk Company was the best performer on the index and was at a record high, gaining as much as 1.4 per cent. Australian broker Morgans on Friday raised the dairy product maker's price target and upgraded their results guidance.