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Australian shares jump on trade optimism; post best weekly gain since August

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[BENGALURU] Australian shares ended higher on Friday, notching their best weekly gain since late August, as encouraging signs from US-China trade talks stirred hopes that a trade deal may be reached.

The S&P/ASX 200 index firmed 0.9 per cent or 59.7 points to 6,606.8.

The improved sentiment came after US President Donald Trump characterised talks between top US and Chinese negotiators as "very, very good".

His comments backed a similar tone from a White House official, who said the talks had gone "better than expected" and as a US Chamber of Commerce official raised the possibility of a currency agreement this week.

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The benchmark posted a weekly gain of 1.4 per cent, albeit in low volumes as the unpredictable nature of the of the tit-for-tat trade war kept investors from making major bets. Weekly volumes were at their lowest since late April.

Financial stocks helped drive much of the gains on Friday, with Macquarie Group rising 2.2 per cent.

The "Big Four" advanced between 0.6 per cent and 1.1 per cent.

Hopes of a trade deal also lifted commodities and oil prices, propping up Australia's energy and mining stocks.

Fortescue Metals Group gained the most among its major peers, up 4.1 per cent, as the world's No 4 iron-ore miner extended its share buyback program for further 12 months.

Global miners BHP Group and Rio Tinto climbed 2.1 per cent and 2.3 per cent, respectively.

The improvement in risk sentiment reduced the sheen of gold miners, which were among the top losers on the benchmark.

Australia's top gold miner Newcrest Mining gave up 1.5 per cent.

Elsewhere, packaging maker Orora Ltd closed 2.3 per cent lower, a day after the company surged on news that it would sell its local fibre materials business for A$1.72 billion (S$1.60 billion).

Analysts expressed concern over the company's exposure to North America if the deal goes through.

In New Zealand, the benchmark S&P/NZX 50 index rose 0.3 per cent to finish the session at 10,923.71. The benchmark advanced for a third straight week.

Diary firm a2 Milk Company rose 2.3 per cent and was among the top boosts.

REUTERS