Australia shares end firmer as US-China tensions ease; NZ up

[BENGALURU] Australian shares rallied on Wednesday, as US President Donald Trump's positive stance on trade relations with China raised optimism of easing discord between the two nations.

The S&P/ASX 200 index traded around half a per cent up through most of the day before climbing 1.4 per cent to end the session at 5,653.5, moving in line with global markets.

In an interview with Reuters, Mr Trump said discussions were underway with Beijing by phone and that tariffs would not be raised on Chinese imports until he was sure about a deal.

The chief financial officer of Chinese telecoms giant Huawei Technologies Co Ltd, Meng Wanzhou, was granted bail by a Canadian court on Tuesday, 10 days after her arrest as per Washington's directive, which had created diplomatic unease.

Mr Trump said he would even intervene in the Justice Department's case against the Huawei executive if it would serve national security interests or help close a trade deal.

MSCI's index of Asian equities outside Japan also recovered on the news after falling around 2 per cent on Tuesday.

Australia counts China as its top trading partner, and a slowdown in the Chinese economy from a trade war will directly affect Australian commodities exports.

Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities said investors were optimistic about China and the United States reaching a trade deal.

"...it looks like a fair amount of shorts are being covered and the market is getting a boost out of that," he added.

The Australian energy index was the best performer for the day, closing the session 2 per cent higher, as energy stocks got a boost from a rise in oil prices.

Origin Energy Ltd climbed 3.6 per cent and hit its highest since Nov. 13, while Woodside Petroleum Ltd rose 2.3 per cent and touched a one-week high; both were top boosts to the energy index.

Oil prices climbed more than 1 per cent on Wednesday, lifted by expectations that an Opec-led supply cut announced last week for 2019 would stabilise markets.

Australian healthcare stocks clocked a second straight day of gains, rising 1.1 per cent. Mayne Pharma Group was the best performer, rising more than 6 per cent to its highest in more than a week.

Financials rose 2 per cent with Westpac Banking Corp and Commonwealth Bank both ending above 2 per cent, while Australia and New Zealand Banking Group and National Australia Bank both rose almost 2 per cent.

New Zealand's benchmark S&P/NZX 50 index rose as much as 0.95 per cent, its biggest intraday per centage gain in nearly two weeks.

Major online marketplace Trade Me Group boosted the benchmark, rising as much as 4.3 per cent to a record high after agreeing to be acquired by a British private equity firm for NZ$2.56 billion (S$2.4 billion).

REUTERS