Australia: Shares scale all-time peaks ahead of trade deal, New Zealand gains

[BENGALURU] Australian shares scaled record highs on Wednesday, buoyed by gains in the mining sector, ahead of the signing of a preliminary trade pact between China and the United States.

As of 0104 GMT, the S&P/ASX 200 index was up 0.3 per cent at 6,980.3. The benchmark ended 0.9 per cent higher on Tuesday.

US President Donald Trump is slated to sign the Phase 1 trade agreement with Chinese Vice Premier Liu He at the White House later in the day.

China has pledged to buy nearly an additional US$80 billion of manufactured goods from the United States over the next two years, Reuters reported, citing a source briefed on the Phase 1 trade deal.

However, capping broader confidence was US Treasury Secretary Steven Mnuchin's comments stating that the United States will maintain tariffs on Chinese goods until the completion of a second phase of a US-China trade agreement.

The contentious trade talks cast a pall over markets for much of 2019 until signs a deal was in place late last year helped lift global equities.

"There is still a lot of speculation on what the deal is going to deliver. There is still a fair amount of intention to do the right thing, but as always the proof is in the pudding," Damian Rooney, director of equity sales at Argonaut said.

Australia's mining stocks rose 0.5 per cent, hitting their highest since Aug 1, 2019. Shares of BHP Group, the world's largest miner and the country's largest stock in terms of market value, soared to a nearly one-month high, providing a major boost to the overall index.

Investors will shift focus to quarterly reports from miners and energy players, that is scheduled to kick off on Thursday.

Trading activity in the Australian market was however low, with volumes only at a fraction of their 30-day average.

"A lot of focus in the land down under is being taken up with the terrible fires ... I think it just resonates and is a slight concern of the social and economic impact going forward," Mr Rooney said.

Australia is going through its worst bushfire season on record, with fires burning since September taking 28 lives, and destroying more than 2,500 homes.

Gold stocks jumped 2.6 per cent, with Evolution Mining and St Barbara adding 4.4 per cent and 5.5 per cent, respectively.

Gold miner Resolute Mining gained as much as 3.4 per cent, after announcing a deal to sell its Ravenswood Gold mine for up to A$300 million (S$279 million) to a consortium led by resource-focused private equity firm EMR Capital.

Energy stocks also lent support to the local benchmark, rising 0.6 per cent to a near one-week high. Oil and gas explorer Beach Energy Ltd added 4 per cent, while Papua New Guinea-focused Oil Search rose 1.2 per cent.

New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent, or 35.48 points, to 11,660.61.

Electricity retailer Genesis Energy and Auckland International Airport were among the top gainers on the benchmark, rising as much as 1.9 per cent and 1.5 per cent, respectively.

REUTERS