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Australian shares flat as inquiry knocks financial sector; NZ up
[BENGALURU] Australian shares were flat on Monday, as a rise in mining stocks on the back of higher gold and metal prices was offset by a weaker financial sector following the initial findings of a powerful inquiry into the local market.
The S&P/ASX 200 index was flat at 6,247.2 by 0200 GMT. The benchmark closed slightly higher on Friday.
The US dollar weakened on the back of comments from US Federal Reserve Chairman Jerome Powell affirming the Fed's current pace of rate hikes, disappointing dollar bulls.
In the resource space, gold stocks were notably higher as Mr Powell's comments, which were interpreted as dovish by some, put the US dollar under pressure, supporting the yellow metal.
Newcrest Mining and Evolution Mining gained as much as 2.7 per cent and 5 per cent, respectively.
Meanwhile, top miners BHP and Rio Tinto each rose more than 1 per cent, as commodity prices also clocked gains on the softer dollar.
"Falling dollar also fed directly into commodity markets - precious and base metals rose," said Michael McCarthy, chief strategist at CMC Markets and Stockbroking.
Copper prices rose 2 per cent to close at US$6,105 a tonne on the London Metal Exchange on Friday, while aluminium, zinc and lead also gained.
A "stronger Aussie dollar works against lot of these companies, so the strength in the commodity prices seems to be overwhelming the currency effect," Mr McCarthy added.
The Australian dollar bounced on Friday, after Treasurer Scott Morrison won leadership of the warring Liberal party to become the country's sixth Prime Minister in less than 10 years.
The 'Big Four' banks eased as initial findings from a Royal Commission inquiry into the financial sector strongly criticised pension funds run by National Australia Bank and Commonwealth Bank of Australia.
NAB and CBA were both trading around 0.2 per cent lower, retreating from slightly heavier losses earlier in the session, with the sector index down 0.4 per cent.
Telecom and technology stocks were the biggest boosts to the index, with Telstra Corp rising as much as 2.2 per cent.
Child care centre operator G8 Education Ltd was the biggest percentage loser on the index, down as much as 15.3 per cent, after forecasting weak market conditions until mid to late 2019.
New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent or 14.62 points to 9,174.25.
The gains were driven by heavyweight a2 Milk Company, which was up as much as 2.1 per cent to its highest in just over two-months, while Synlait Milk was up 4 per cent.