Australia: Shares gain on rate cut prospects; New Zealand up

[BENGALURU] Australian shares rose on Monday, boosted by rising bets the central bank could cut interest rates as early as October after weak jobs data last week sparked expectations of more stimulus.

The country's jobless rate worsened to a one-year high of 5.3 per cent in August, data showed on Thursday, raising the probability the Reserve Bank of Australia may cut rates at its next policy meeting on Oct 1. The S&P/ASX 200 index rose for a third straight session, adding 32.8 points to 6,762.80 by 0139 GMT. The benchmark rose 0.2 per cent on Friday.

"One of the big movers for the Aussie market has been the job numbers coming through last Thursday basically lifting expectations of the interest rate cut to be brought forward to October," said James Tao, market analyst at CommSec.

"The low interest rate environment generally fosters more investment into equities and has helped give the Aussie market a bit of a boost in the past few sessions," he added.

Further adding to the upbeat sentiment, the US Trade Representative's office released a statement saying US and Chinese negotiators had held "productive" talks in Washington, fuelling hopes that both nations were making progress towards a trade deal.

Mining stocks logged firm gains, with iron ore majors Fortescue Metals Group and Rio Tinto rising between 1 per cent and 0.7 per cent, respectively. Mining giant BHP inched slightly higher.

Financials also posted small gains, largely boosted by wealth manager IOOF Holdings, which racked up the biggest gain on the index.

IOOF's stock jumped 9 per cent, adding to Friday's substantial gains which came after a court ruled that the country's banking watchdog had not proved its case alleging that IOOF had breached pension laws.

Specialty retailer Premier Investments was the index's second-biggest gainer, adding 5.8 per cent. The company defied a retail downturn in the country to post a surge in annual profit, with shares recording their best session in nearly 18 years on Friday.

A 1 per cent jump in oil prices supported energy stocks, with Beach Energy adding 2.7 per cent. Woodside Petroleum Ltd 1.2 per cent while Santos 0.6 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent or 30.76 points to 10,860.15.

Dairy giant a2 Milk Company Ltd rose 2.5 per cent, while telco Spark New Zealand added 1.4 per cent.

REUTERS