Australia: Shares rise on China policy easing; New Zealand up

[BENGALURU] Australian shares rose over 1 per cent on Friday, tracking gains on Wall Street as investors cheered China's policy easing move and a private survey showing solid growth in production last month.

The S&P/ASX 200 index gained 1.2 per cent to 6,769.50 by 0209 GMT, after settling 0.1 per cent higher on Thursday. However, it was down about 1 per cent for the week, heading for its biggest weekly drop since the week ended Dec. 6.

Wall Street's three major indexes closed at records highs on Thursday after the People's Bank of China said it would lower the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan (S$155 billion) in funds to shore up the slowing economy.

Additionally, a survey showed Chinese production activity in December continued to grow and business confidence strengthened, indicating a recovery in the world's second-largest economy in the wake of a Phase 1 trade deal with the United States.

China's stimulus measure "allows more opportunity for investment and growth in the Chinese economy ... and it certainly helps our companies that have a lot to do with trade," said James Tao, a market analyst at CommSec.

China is Australia's largest trading partner, and the health of the domestic economy relies a lot on its trade with the Asian nation.

"Mining, obviously being our largest export to China, will certainly see some benefit," Tao added.

Mining stocks rose as much as 1.3 per cent, heading for their best session in a week, on strong iron ore prices. The sub-index has declined 0.4 per cent so far this week after three straight weeks of gains.

BHP Group, the world's largest miner, advanced 1.4 per cent in its best intraday gain since Dec 16, while peer Rio Tinto rose 1.8% to one-week high.

Financials strengthened 1.4 per cent, their biggest intraday percentage gain since Dec 16. On a weekly basis, the sector was on course for its biggest decline since the week ended Dec 6.

All the 'big four' banks were trading in the positive territory.

Stronger oil prices helped the energy sub-index gain 0.9 per cent, with Woodside Petroleum climbing 0.8 per cent, while Santos advanced nearly 1 per cent.

Healthcare stocks rose 2 per cent, driven by industry heavyweight CSL's over 2 per cent gain.

New Zealand's benchmark S&P/NZX 50 index advanced 0.6 per cent to 11,555.97 as markets resumed trade after two days of holidays. Auckland Airport and Sky Network Television were the top gainers.

The benchmark was down 0.4 per cent on a weekly basis, on track for its biggest drop since the week ended Oct 25, 2019.

REUTERS