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Australia: Shares touch highest point since mid-November; New Zealand gains too

[BENGALURU] Australian shares climbed to a more than two-month high early on Friday, with banks and material stocks leading gains as renewed hopes for a thaw in the US-China trade war boosted risk appetites.

At 0058 GMT, the S&P/ASX 200 index was up 0.5 per cent or 29.9 points to 5,880, which put it up 1.8 per cent for the week. The benchmark rose 0.3 per cent on Thursday.

Trade-related optimism revived after the Wall Street Journal reported US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during the next round of trade talks scheduled for Jan 30.

However, US stocks pared some of their gains after a Treasury spokesperson told CNBC that Mnuchin had not made any such recommendations.

Damien Hennessy of investment adviser Heuristic Investment Systems in Melbourne said the uncertainty that battered stocks in 2018 has been "diminished somewhat" by Federal Reserve signals of a likely pause in tightening and by comments on the US-China dispute.

Financial stocks, which account for nearly half the benchmark, climbed 0.7 per cent and were poised for a fifth straight session of gains.

Biggest lender Commonwealth Bank of Australia firmed 0.8 per cent to a near five-month high even as it flagged non-cash losses of about A$169 million (S$165 million) in the first half.

The other "Big Four" banks rose between 0.4 per cent and 0.7 per cent.

The metals and mining sector also lent support, rising 0.8 per cent to touch an over 3-month high.

Global mining giant Rio Tinto gained as much as 1.3 per cent after its 2018 iron ore shipments from Australia's Pilbara region rose 2 per cent and it set a higher target for 2019.

The world's biggest miner BHP Group, due to report second-quarter production next week, climbed 0.9 per cent.

The resources sector, a key driver of the Australian economy, was poised for a second straight advance, helped by gains in copper and iron ore prices.

Payment service provider Afterpay Touch Group surged 11.5 per cent to its highest since Oct 9, after saying underlying sales in the first half rose to more than A$2.2 billion.

New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent or 15.78 points to 9,093.59.

Financials and industrial stocks led gains, with New Zealand shares of Australia and New Zealand Banking Group rising 1.4 per cent, and dairy company Synlait Milk strengthening 0.8 per cent.