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Australia: Shares gain after China central bank comments
[SYDNEY] Australian shares recovered from two days of losses to rise 0.6 per cent on Thursday after China's central bank said there was no basis for further depreciation in the yuan, sending banks and gold stocks higher.
The People's Bank of China (PBOC) said that the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provide"strong support" to the exchange rate.
Australian shares fell 2.3 per cent in the last two days on worries China may be in worse shape than had been believed following a surprise move to devalue the yuan for the second consecutive day.
The S&P/ASX 200 index rose 30.3 points to 5,412 by 0330 GMT. The benchmark fell 1.7 per cent on Wednesday to close at its lowest level in seven months. "The market is just a little bit comforted by the fact that the size of the (yuan) devaluation today was a little lower at about 1.1 per cent," Ric Spooner, chief market analyst at CMC Markets.
Australia is China's No.1 trading partner.
Investors turned to banks for yield after shares fell 14-21 per cent from their 2015 highs. Westpac rose 1.4 points while ANZ and National Australia Bank rose 1.3 per cent and 1.2 percent respectively.
Top-listed wealth manager AMP rose 1.4 per cent after Morningstar upgraded its rating on the stock.
Gold miners joined the party with Newcrest up 4.5 per cent, hitting a two-week high.
Crown Resorts, Australia's biggest casino company, fell 2.7 per cent after reporting a 41.3 per cent fall in full-year net profit.
Australia's Sirtex Medical Ltd rose to a five-month high after posting a 69 per cent jump in annual net profit.
For more individual stocks activity click on New Zealand stocks fell for a sixth consecutive session with the benchmark NZX50 share index down 0.2 per cent to 5,743.42, a one-month low.
Investors were still wary about China's currency policies, but took some comfort from signs the sharp slide in the yuan had slowed.
Telecommunications company Spark fell 1.8 per cent to its lowest since late May, and casino operator Sky City was down another 1.4 per cent as investors remained unimpressed by the company's earnings on Wednesday.
Offsetting some of the weakness was a 1.5 per cent rise in accounting software company Xero, which said it now had 400,000 subscribers in New Zealand and Australia.
Fruit grower Scales Corp was up 1.5 per cent as it upgraded its earnings forecasts.