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Australian, NZ stocks higher after Sino-US trade truce
[BENGALURU] Australian shares closed higher on Monday, tracking global gains as investor confidence improved following an apparent truce between leaders of the world's two largest economies over trade issues.
US President Donald Trump and his Chinese counterpart Xi Jinping agreed on the sidelines of G-20 summit held in Argentina, that the former would not raise tariffs on US$200 billion worth of Chinese goods to 25 per cent on Jan 1, as previously announced.
Tensions between the two countries have hurt global markets that are highly exposed to trade, such as Australia's.
The S&P/ASX 200 index rose 1.8 per cent, or 104 points, higher at 5,771.2, posting its best intraday gain since July 4, 2017. The benchmark index finished 1.6 per cent lower on Friday.
"The temporary truce declared between China and the United States is positive for risk assets across the board," said Michael McCarthy, chief market strategist at CMC. Energy stocks closed 4.6 per cent higher, posting their strongest gain in over two years, boosted by a surge in oil prices, thanks to the US-China agreement and ahead of a meeting this week by producer club Opec that is expected to result in a supply cut.
Oil and gas explorer Woodside Petroleum Ltd closed 3.5 per cent higher while peer Santos Ltd ended the day 8.7 per cent up.
The metals & mining index firmed 3.3 per cent with global miner BHP Group Ltd closing 3.7 per cent higher while Rio Tinto finished up 2.3 per cent.
Financial stocks pared some of their losses clocked on Friday, inching up 0.8 per cent.
The country's top two lenders Commonwealth Bank Of Australia and Westpac Banking Corp ticked up 0.5 and 1.1 per cent, respectively.
Shares of bulk grain handler GrainCorp Ltd soared 34 per cent to A$9.800 after a A$2.38 billion takeover offer from Long-Term Asset Partners.
GrainCorp posted its best trading session in more than six years, ending almost 27 per cent higher but fell short of the bid price of A$10.42 per share.
Mr McCarthy said there was still a "high degree of doubt" regarding the deal's feasibility, considering how little was known about LTAP's financial backers and the buyer's plans for Graincorp.
New Zealand's benchmark S&P/NZX 50 index closed 0.6 per cent, or 52.55 points, to finish the session at 8,876.09.
Dairy producer A2 Milk Company Ltd was the top per centage gainer on the index, closing 5.4 per cent up.