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Australia: Shares rise to 17-month high in strong start to 2017

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[BENGALURU] Financials and materials lifted Australian shares to a near 17-month high on the first trading day of the year, with the benchmark topping 5,700 points.

The S&P/ASX 200 index rose 58.9 points, or one per cent, to 5,724.7 by 0123 GMT, its highest since Aug 2015.

The index climbed 7 per cent in 2016, its best yearly performance since 2013, as gains in most commodity prices powered a bull run among miners.

The financial sector accounted for most of the gains on Tuesday, led by Australia and New Zealand Banking Group, Australia's third-largest bank by market cap, which rose as much as 1.7 per cent to touch a 16-month high. It was the single biggest contributor to the benchmark's gains.

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The bank said it would sell its stake in Shanghai Rural Commercial Bank Co Ltd to China COSCO Shipping and Shanghai Sino-Poland Enterprise Management Development for A$1.8 billion (S$1.88 billion).

The sale is expected to increase the bank's APRA CET1 capital ratio by around 40 basis points.

"Gains in financials are definitely broad-based. There are specific situations such as (ANZ's stake sale) that are clearly positive - but gains are right across the board," said James McGlew, executive director of corporate stockbroking at Argonaut.

The benchmark also got a lift from miners, with BHP Billiton and Rio Tinto rising 1.6 per cent and 1.5 per cent, respectively. Chinese steel and iron ore prices snapped long losing streaks in 2016.

Retail giants Wesfarmers Ltd and Woolworths Ltd both rose more than one per cent.

Oil major Woodside Petroleum climbed 1.6 per cent while Beach Energy was up 1.8 per cent. US oil prices rose in the first trading hours of 2017 on Tuesday, buoyed by a deal for Opec and non-Opec production cuts which kicked off on Sunday.

At the other end, the gold index slipped 1.1 per cent after prices for the precious metal eased on Friday as gains from a weak US dollar was offset by profit-taking at the end of a year in which bullion gained about 8 per cent.

Gold miner Evolution Mining fell 1.9 per cent while Newcrest Mining slid 1.3 per cent.

Volumes were largely tepid, with 126.6 million shares changing hands, around 20 per cent of the 30-day average of 641.6 million shares, according to Thomson Reuters data.

New Zealand's share market was closed for a public holiday and will re-open on Wednesday. The benchmark S&P/NZX 50 index gained 8.8 per cent in 2016.