Australia: Shares rise on banks, Navitas soars; New Zealand flat

[BENGALURU] Australian shares edged higher on Tuesday, boosted by banks which tracked gains in their US peers, though concerns about a slowdown in China's economy restrained overall sentiment.

Shares of adult education provider Navitas jumped as much as 15.3 per cent and was the market's top performer, after it received a sweetened A$2.09 billion (S$2.04 billion) buyout offer from a consortium of its founder Red Jones and private equity firm BGH.

The S&P/ASX 200 index rose 0.2 per cent, or 12.7 points, to 5,785.8 by 0057 GMT. The benchmark ended 0.02 per cent lower on Monday.

Exports from China, Australia's top export market, posted their biggest drop in two years in December, data showed on Monday, while imports also contracted, pointing to further weakness in the world's second-largest economy.

The disappointing data rekindled fears of slackening global growth, causing investors to move away from riskier assets.

But financial stocks, which account for nearly half the benchmark, followed their Wall Street peers higher and climbed as much as 0.7 per cent to a near six-week high.

The financial sub-index posted modest gains after Citigroup Inc reported better than anticipated fourth-quarter earnings.

Top lender Commonwealth Bank of Australia led financial stocks higher, rising 0.6 per cent, while the rest of the 'Big Four' banks gained between 0.2 per cent to 0.6 per cent.

Damien Hennessy, co-founder of Heuristic Investment Systems, said the positive sentiment emanating from gains in US banks was flowing through to Australia.

"There are still a number of risks around the sector - predominantly very slow and weak credit growth is a key factor for the banking sector domestically," Mr Hennessy added.

Australia's financial stocks were under pressure last year after a high profile inquiry provided shocking revelations of misconduct and wrongdoing at the country's top banks.

The final report of the inquiry is due Feb 1 and could spark wide-ranging industrial reform.

Energy stocks also lent support to the benchmark gaining 0.7 per cent, with sector heavyweight Woodside Petroleum advancing 0.7 per cent, while coal miner Whitehaven Coal added 1.9 per cent.

Gold stocks benefitted from a pullback in global equities, as a shock contraction in Chinese imports and exports prompted investors to seek safety in the precious metal.

St Barbara rose 1.7 per cent, while Northern Star Resources Ltd climbed 1.8 per cent.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index was flat at 8,972.58.

Financials and consumer stocks led gains on the benchmark, with dairy company A2 Milk gaining 2.9 per cent, while commercial real estate developer Goodman Property Trust strengthened 0.6 per cent.

REUTERS