Australia: Shares gain as jobless rate fuels stimulus hopes; NZ up

[SYDNEY] Australian shares advanced on Thursday led by financial sector stocks as data showing unemployment at its highest in a year reinforced expectations of more central bank stimulus.

The S&P/ASX 200 index ended about 0.5 per cent or 32.4 points higher at 6,714.50 by 0539 GMT. The benchmark shed 0.2 per cent on Wednesday.

The jobless rate rose to 5.3 per cent in August as more people looked for work.

Analysts at RBC Capital Markets said in a note that the data was broadly consistent with the Reserve Bank of Australia's forecasts but would add to "pressure for further rate cuts".

"We expect that a further increase in the unemployment rate 5.4 per cent by the end of the year and subdued economic activity will force the RBA to cut interest rates to 0.5 per cent by early next year", Ben Udy, Australia & New Zealand economist at Capital Economics said in a note.

Energy stocks ended 0.4 per cent lower, wiping out earlier gains, with oil and gas heavyweights Santos Ltd and Oil Search both reversing course to close about 0.5 per cent lower.

The mining sector was dragged lower by gold stocks, after bullion prices fell in light of the US Fed's mixed signals, with gold explorers Silver Lake Resources and Saracen Mineral among the top losers by the close.

Miners were also hit by lower iron ore prices, which were dragged lower by increasing supply in China, while copper prices slipped as concern about demand and economic growth dominated sentiment.

New Zealand's benchmark S&P/NZX 50 index finished 0.2 per cent or 26.2 points higher at 10,801.05, lifted by energy and healthcare stocks.

REUTERS