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Australia: Shares firm as resources share gains offset weak bank stocks
[SYDNEY] Australian shares dithered either side of flat on Tuesday with bank stocks in the red after National Australia Bank traded ex-dividend, while oil and metal prices swung higher to boost resource stocks.
The strength in resource stocks lifted the index up as much as 0.6 per cent in early trade. The S&P/ASX 200 index inched up 0.07 per cent, or 4.298 points, to 5842.7 by 0317 GMT. The benchmark ended 0.03 per cent higher on Monday.
A recovery in iron ore prices, after falling for seven straight weeks to near four-month lows, lifted sentiment. The mineral rose slightly while London copper climbed 1 per cent.
World's biggest miner BHP advanced as much as 1.3 per cent to its highest in nearly three weeks on its seventh straight day of gains.
Activist investor Elliott Management upped pressure on the Anglo-Australian miner to review its petroleum assets stating there were clear signs that the market was receptive to a new strategy.
Mining heavyweights Rio Tinto and South32 gained as much as 1.4 per cent and 2.6 per cent respectively.
Oil prices jumped 2 per cent after top producers Saudi Arabia and Russia agreed on the need to extend supply cuts to 2018.
The energy index rose 1.4 per cent to record its biggest single-day rise in a week.
The market also tracked Wall Street which notched fresh closing highs, buoyed by increasing demand for technology stocks following the global cyber attack.
"The move is not surprising given that we saw some positive leads from Wall street overnight and with oil prices going up," said Christopher Conway, head of research and trading at Australian Stock Report. "The other part of the puzzle is that the market had been testing the 5800 support level and as it has done that in the recent past it has generally bounced from that level."
Investors were waiting on the sidelines for a reason to buy the weakness and the rise in materials and the Wall Street was their cue, Mr Conway added.
On the other hand, bank stocks were in the red, with National Australia Bank sinking as much as 3.3 per cent, after going ex-dividend. The country's fourth-biggest lender recorded its biggest one-day fall in six months, snapping three days of gains.
Macquarie Group, Australia's biggest investment bank, dipped as much as 2.4 per cent to its lowest in more than three weeks.
New Zealand's benchmark S&P/NZX 50 index nudged 0.08 per cent, or 5.98 points, lower to 7,423.96.
Software services provider Xero Ltd was the biggest gainer, rising 3.9 per cent while Heartland Bank, down 1.7 per cent, was the biggest decliner.