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Australia: Shares join global rally as miners bounce, CSL gains
[BENGALURU] Australian shares joined a global equities rally on Wednesday as heavyweight mining stocks benefitted after Washington delayed tariffs on some Chinese imports that were slated to take effect in September.
The boost from the US announcement overnight eclipsed a raft of unexpectely weak data from China which pointed to a further loss of economic momentum, including the weakest industrial output growth in more than 17 years.
The benchmark S&P/ASX 200 index advanced as much as 0.5 per cent in early trade, also supported by strong gains in CSL Ltd after the biotech giant reported record earnings for 2019. The market eased slightly to 6,575.10, up 6.6 points by 1.50am GMT (9.50am SGT).
The index closed 0.3 per cent lower on Tuesday on concerns about a number of geopolitical events, including the trade war, Hong Kong protests and Argentina's peso crash.
US President Donald Trump's decision to selectively delay tariffs on certain imports that were set to go into effect on Sept 1 was seen by many as possibly dialling down immediate frictions that have been at the forefront over the last week.
RBC Economists Nathan Janzen and Claire Fan said in a note that the postponement provides some respite but not an end to the uncertainty over trade policy, noting the issue was "moving back closer to a simmer than a boil".
Major miners Rio Tinto and Fortescue Metals Group jumped as much as 4.8 per cent and 5.5 per cent, respectively.
Australian miners are particularly exposed to the trade war as the Asian giant is the country's largest trading partner.
CSL, Australia's fourth-largest listed company, provided the biggest boost to the benchmark on the back of its strong 2019 results. CSL climbed as much as 7.4 per cent to an all-time high.
At the other end of the market, gold stocks, which have been in favour with investors as a safe haven amid trade tensions, sank lower. Newcrest Mining dropped 3.6 per cent, while Evolution Mining fell 6.5 per cent.
Overall gains were also capped by a 3.2 per cent fall in Australia's top lender Commonwealth Bank of Australia as it traded ex-dividend.
National Australia Bank, the third largest lender by market value, fell 0.3 per cent after reporting flat growth in its third-quarter cash profit and flagged more expenses related to customer remediation in the second half of fiscal 2019.
New Zealand's benchmark S&P/NZX 50 index edged 0.1 per cent higher to 10,864.07.
Vista Group, which supplies software to the global movie industry, led the gains with a 2 per cent rise, while Synlait Milk rose 1.9 per cent.