Australia: Shares surge to highest since Nov 2007; New Zealand at another peak

[BENGALURU] Australian shares surged to their highest in more than 11-1/2 years on Thursday as further signs of weakness in the US economy raised expectations the Federal Reserve will start cutting interest rates.

At 0142 GMT, the S&P/ASX 200 index was up 0.7 per cent, or 44.40 points to 6,729.60, tracking record highs in US stocks overnight.

The benchmark extended gains into a fourth straight session, and was about 120 points shy of its all-time high touched in 2007.

US stocks surged, and treasury yields plunged after data showed the US trade deficit in May jumped to a five-month high while services sector data for June showed a slowdown in activity.

Financial stocks rose 1 per cent, giving the biggest boost to the Australian benchmark, with the Big Four banks all firming more than 1 per cent. Australia and New Zealand Banking Group led those gains with 1.3 per cent.

Hopes for a third Australian rate cut in 2019 were bolstered after May retail sales data disappointed and job vacancies fell from record highs.

ANZ, Westpac Banking Corp and Commonwealth Bank of Australia said they were exploring blockchain technology through a partnership with IBM and shopping mall owner Scentre Group.

Shares of Scentre rose 2 per cent. A recent rate cut by the Reserve Bank of Australia has lifted real estate stocks on the prospect of increased lending.

Retirement home operator Aveo Group was among the market's largest gainers after confirming it was in talks for a possible takeover by the real estate investment arm of Canada's Brookfield Asset Management. The stock rose more than 4 per cent.

Large mining stocks edged lower on profit-taking. BHP Group and Rio Tinto, which advanced the past three sessions, both fell more than 0.3 per cent.

The stocks, which had surged tracking record-high iron ore prices, weighed on the mining subindex, which fell about 0.5 per cent.

Lithium miner Pilbara Minerals was the largest loser on the ASX 200, shedding 4.8 per cent.

The New Zealand benchmark S&P/NZX 50 index, which closed at record highs the past two days, climbed 0.2 per cent on Thursday to intraday record of 10,563.550.

Support came from the local stocks of Australian banks. Westpac Banking and ANZ were up 0.4 per cent and 1.4 per cent, respectively.

REUTERS