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Australia shares rise as consumer sector firms; NZ up on a2 Milk supply deal
[BENGALARU] Australian shares rose on Tuesday as a lower local dollar helped to offset some of the relentless pressure stemming from US-driven trade war concerns, with A2 Milk Company leading the way for consumer firms.
Financials picked up a little, hours ahead of the Reserve Bank of Australia's (RBA) policy meeting, where policy-makers are likely to hold rates at record lows.
That was countered somewhat by selling in material stocks amid weaker raw material prices, as investors fretted about the economic impact of China's bitter trade dispute with the United States.
The S&P/ASX 200 index rose 0.5 per cent, or 18.9 points to 6,196.7 by 0148 GMT. The benchmark slipped 0.3 per cent on Monday.
The S&P/ASX 200 Consumer Staple index climbed 1.3 per cent, after Synlait Milk extended a supply deal with A2 Milk Company Ltd by two years for a2 Platinum infant formula and other nutritional products.
A2 Milk Company shares rose 4.4 per cent.
The gains spilled over into other milk product makers like Blackmores and Bellamy's Australia, which added as much as 1.3 per cent and 3.4 per cent, respectively.
Healthcare stocks, which earn a substantial portion of their income in the United States and benefit from a weaker Aussie dollar, were the second biggest contributors to overall gains.
The Aussie dollar once again slipped to recent lows as global trade tensions manifested into weaker Chinese asset prices.
"The growth stocks are having a bounce because they were sold down in the last week and with the tech stocks bouncing in the United States, there is a bit of growth appetite coming back to the market," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.
Index heavyweight biotherapeutics company CSL Ltd, climbed 1.7 per cent to an over one week high.
Ahead of the RBA policy review, the "Big Four" were all trading in positive territory, with Commonwealth Bank of Australia leading the way, rising as much as 1 per cent.
Australia and New Zealand Banking was up as much as 0.7 per cent, having sustained two sessions of heavy losses after it warned of continued difficult trading conditions in the foreseeable future.
In the materials space, top miners, BHP and Rio Tinto both fell as much as 1.8 per cent, pressured as copper prices hit seven-month lows on Monday.
Chinese steel and iron ore futures dropped after data pointed to slower factory growth in China last month.
New Zealand's benchmark S&P/NZX 50 index climbed over 1 per cent, or 96.9 points to 9,039.37, with New Zealand shares of a2 Milk Company supporting the index.
EBOS Group extended gains, climbing as much as 5.9 per cent to a fresh record high after snapping up a deal on Monday, to distribute pharmaceutical products to over 400 Chemist Warehouse and My Chemist stores in Australia.