Australia shares gain as investors track higher US futures; NZ up

[BENGALURU] Australia shares rose on Monday, taking their cue from higher US stock futures with the healthcare sector and consumer staples helping to soothe nervousness over an escalating US-China trade spat.

The major US indices dropped between 2.2 per cent and 2.3 per cent on Friday after US President Donald Trump threatened to slap US$100 billion more in tariffs on Chinese imports.

However, E-Mini futures for the S&P 500 on Monday were up 0.7 per cent, while Nasdaq futures rose 0.9 per cent.

"I think local investors were a bit surprised at the depth of the selloff from Friday night in the US," said Michael McCarthy, chief market strategist at CMC Markets.

The S&P/ASX 200 index gained 0.4 per cent, or 20 points, to 5,808.7, its third gain in four sessions. It was little changed on Friday.

Biotherapeutics firm CSL Ltd was the main index's biggest contributor, rising 1 per cent. On Monday, Swiss drugmaker Novartis agreed to buy US gene therapy company AveXis Inc for US$8.7 billion in cash.

Australian healthcare stocks gained, with Sonic Healthcare Ltd and Australia listed shares of Fisher & Paykel Healthcare Corp Ltd rising 1.3 per cent and 2.1 per cent, respectively.

Mining major BHP ended marginally higher while rival Rio Tinto recovered from early losses to close 0.3 per cent higher.

Among financials, Commonwealth Bank of Australia tacked on about 0.1 per cent while fellow lender Westpac Banking Corp gained 0.2 per cent. The sector index was marginally higher.

On Monday, mining infrastructure group Mineral Resources Ltd said it agreed to buy iron ore miner Atlas Iron Ltd via a scheme of arrangement, valuing Atlas at US$215.2 million.

Atlas Iron's shares closed 42.1 per cent higher while those of Mineral Resources lost 6.9 per cent.

"There is also a bid on the table for Santos, Beach Petroleum also under bid, so this is something we are certainly looking out for in current markets... it does show potential for improved valuation," said CMC Markets' Mr McCarthy.

Mr McCarthy said that Atlas' small market cap meant the deal was not a significant play overall but added to the resource sector theme of smaller companies being vulnerable to takeovers.

On the other hand, energy stocks were Monday's only losers with the sector index slipping 0.4 per cent, despite a recovery in oil prices.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.7 per cent, or 60.86 points, to 8,454.13, helped by gains in materials and health care stocks.

Fletcher Building Ltd ended 2.7 per cent higher while Fisher & Paykel Healthcare Corporation Ltd gained 2.8 per cent.

REUTERS