Australia: Shares extend gains despite negative iron ore forecast; New Zealand up

[BENGALARU] Australian shares advanced on Monday, matching gains on Wall Street, as US employment data boosted sentiment, offseting losses in basic materials that followed forecasts of severe falls in iron ore prices through 2018.

The S&P/ASX 200 index gained 0.65 per cent, or 37.319 points, to 5,792.3, its highest in 19 months, by 1236 GMT. The benchmark was up 0.04 per cent on Friday.

Even though US employment rose by less than anticipated in December, labour market momentum was sustained by rising wages and solid payroll numbers.

"The revision to the upside and the strong wage data was obviously a big factor. That is certainly positive economic data out of the US and something we are keen on at this stage," said Ben Le Brun, a market analyst with Optionsxpress.

Financials dominated the benchmark with the S&P ASX 200 Financials Index hitting a 20-month high in its fifth straight session of gains.

The "Big Four" banks recorded gains, rising 0.3 per cent to 0.7 per cent.

CSL Limited gained as much as 1.4 per cent to reach its highest in more than more than a month after it won European Commission marketing authorisation for its haemophilia medication.

Retail giant Woolworths Limited rose as much as 1.3 per cent in early trade.

Glove and condom maker Ansell Ltd surged up as much as 2.3 per cent to hit its highest in 17 months.

At the other end, index heavyweights BHP Billiton, Rio Tinto and South32 lost considerably, falling as much as 0.8 per cent, 1.4 per cent and 2.1 per cent respectively.

Fortescue Metals Group Limited slumped to its lowest in more than two weeks, falling as much as 3.8 per cent.

Australia's Department of Industry, Innovation and Science expects the prices of iron ore, the country's biggest export commodity, to decline drastically over the next two years, to well below current market prices, due to the temporary nature of the current lift in Chinese steel production. "Seeing a bit of weightiness from the materials sector. Otherwise we see strength pretty much across the board...This continues the onward and upward story so far. We have started the year very much on the front foot," said Mr Brun.

New Zealand's benchmark S&P/NZX 50 index rose as much as 0.4 per cent, or 27.9 points, to touch a two-month high in early trade.

The healthcare sector was among the biggest gainers with Fisher and Paykel Healthcare Ltd gaining 1.4 per cent.

Auckland International Airport Limited rose as much as 1.9 per cent while Meridian Energy gained 1.2 per cent.

On the other hand, Fletcher Building Limited extended losses into a third day, sliding as much as 2.1 per cent.

REUTERS