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Australia: Shares rebound on resources sector as iron ore posts modest rise
[Sydney] Australian shares recovered 0.7 per cent on Tuesday, underpinned by a recovery in the resources sector as iron ore, copper and other base metals clawed higher, though a dip in a business survey kept some investors wary.
The resource sector rallied 2.2 per cent as it posted a recovery after being routed since early September by a slump in iron ore prices.
Iron ore for immediate delivery to China .IO62-CNI=SI rose 4 per cent to US$83.10 a tonne.
BHP Billiton Ltd climbed 2.4 per cent, Rio Tinto Ltd jumped 3.1 per cent, while OZ Minerals Ltd soared 8.5 per cent after saying production from its major Prominent Hill mine was strong and on track to meet full-year guidance. "It's a bit of short-covering and it's buying from very low levels," said Peter Esho, a managing partner at 100 Doors, a wealth management firm in Sydney. "I don't think commodities have completely turned, I think it's the iron ore stocks coming off from ridiculously low levels." The S&P/ASX 200 index gained 35.9 points to 5,191.4 by 0110 GMT. The benchmark has been on a downward trajectory since September, as a rout in iron ore prices, a rise in bond yields and concerns over slowing growth in China, Australia's largest export market, has kept investors away from local equities.
Top 20 stocks on the ASX 200 also rose, with defensives Wesfarmers Ltd and Cochlear Ltd adding 1.9 per cent and 0.3 per cent each. Among financials, Westpac Banking Corp rose 0.7 percent, while National Australia Bank edged 0.6 percent higher Elsewhere, a measure of Australian business conditions eased in September to its lowest in four months. "Growth concerns continue to rattle global investors," said Michael McCarthy, chief market strategist at CMC Markets in a note.
US stocks dropped more than 1 per cent overnight, with the S&P 500 closing below a key technical support level, as declines in energy and airline shares led a late-day selloff.
Mount Gibson Iron Ltd soared 9.6 per cent after its September quarter iron ore sales revenue came in at A$117 million.
Caltex Australia Ltd added 1.1 per cent after announcing its Kurnell Terminal in Sydney has started operation.
Shares in Australian online travel firm Wotif.com Holdings Ltd fell more than 7 percent to three-week lows of A$3.05 after the New Zealand Commerce Commission said it has briefly delayed its regulatory ruling on Expedia Inc's acquisition of the company.
New Zealand's benchmark NZX50 index slipped 45.24 points or 0.8 per cent to hit an eight-week low around 5,124.81, taking losses into a third session on the back of an ongoing sell-off in Xero.
The accounting software developer slumped 3 per cent to a 13-month low of NZ$16.75 (US$13.17) as investors become more concerned about its global expansion plans as competition heats up in overseas markets including the United States.
Refining New Zealand fell 2.7 per cent to NZ$1.67 as profit-taking knocked the country's only oil refiner from a three-month high of NZ$1.73 hit on Monday.
Building materials manufacturer Fletcher Building slipped 1.9 per cent to NZ$8.48, its lowest since the start of the year on worries that its overseas sales could be hit by ongoing concerns about the global growth outlook.