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Australian shares end higher as Italy turmoil eases; NZ posts bumper month

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[BENGALURU] Australian shares rode broad-based gains led by materials stocks to close higher on Thursday, tracking a global rally in equities as Italy's political turmoil receded, but health stocks were hit by US President Donald Trump's talk of "voluntary massive drops" in drug prices.

The S&P/ASX 200 index rose 0.5 per cent or 27.2 points to 6011.9. The benchmark marked a monthly gain of 0.5 per cent.

Global markets were rattled this week when Italy's two anti-establishment parties scrapped plans to form a coalition but some calm was restored when the parties renewed efforts to collaborate.

Australia's mining stocks closed 1.8 per cent higher and contributed most of the gains on the benchmark after commodity shares rose on upbeat metal prices.

Global mining heavyweights Rio Tinto and BHP Billiton gained 1.2 per cent and 1.8 per cent, respectively.

The index of financial stocks gave up earlier gains to end flat and Commonwealth Bank of Australia closed at its lowest in almost five years, down 0.4 per cent.

"It's just a currency expectations play. When the global guys think our currency is going to fall, they tend to sell out of our banks to reduce exposure to Australia," said Mathan Somasundaram, Market Portfolio Strategist at Blue Ocean Equities.

The Australian dollar bounced off key chart support on Thursday but stayed trapped in a narrow band.

Healthcare stocks registered most of the losses on the index, down 0.5 per cent.

Mr Trump on Wednesday said he expects major drug companies to slash prices on their products in two weeks.

"If that is the case, that means healthcare costs are going to be going down. So pretty much all the global businesses like CSL, Cochlear, potentially their markets might get squeezed so that's a worry," said Mr Somasundaram.

Index heavyweight CSL Ltd was the biggest drag, falling 0.7 per cent in the session. Cochlear Ltd lost 1.1 per cent.

Software developer MYOB Group had the biggest per centage loss on the benchmark, dropping 8.2 per cent to close at its lowest in more than two years.

The fall followed news MYOB had scrapped its A$180 million acquisition of Reckon Ltd's accounting practice software arm.

New Zealand's benchmark S&P/NZX 50 index was 0.1 per cent or 10.93 points higher at 8,658.79. The benchmark posted its best month since December 2017.

Consumer staples and healthcare stocks led gainers on the index, with Synlait Milk and Fisher & Paykel Healthcare up as much as 5.1 per cent and 1.4 per cent, respectively.

REUTERS

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