Australian shares up on banks but telcos cap gains; NZ down

[BENGALURU] Australian shares inched higher on Tuesday, supported by banks as investors hunted for bargains, though a decline in Telstra Corp capped gains.

The S&P/ASX 200 index rose 0.3 per cent, or 17.5 points, to 6021.5 at 0257 GMT. The benchmark declined 0.5 per cent on Monday.

An index of Australia's top financial stocks climbed as much as 0.9 per cent led by Commonwealth Bank of Australia which rose up to 1.4 per cent.

Christopher Conway, head of research and trading at Australian Stock Report, said some bargain hunting was helping to shore up the market.

The revelations of misconduct by participants from a year-long inquiry into Australia's financial sector have shaved off about 7.4 per cent of the value from the financial index since the inquiry was announced on Nov 30.

Materials and energy stocks also added to gains on the index.

Mining stocks climbed up to 0.7 per cent led by Galaxy Resources, which jumped 18.1 per cent to its best in more than two months after announcing the sale of certain lithium mining tenements in Argentina to South Korean steelmaker POSCO for US$280 million.

Mining heavyweights Rio Tinto and BHP Billiton rose up to 0.3 per cent and 0.9 per cent, respectively as iron ore prices climbed.

Bauxite miner South32 Ltd added up to 1.1 per cent after it said it would buy a 50 per cent stake in the Eagle Downs metallurgical coal project in Queensland state from state-owned China BaoWu Steel Group for US$106 million.

Energy stocks snapped a five-session losing streak to add up to 0.5 per cent as oil prices edged up.

Woodside Petroleum and Beach Energy gained 1.7 per cent and 2.7 per cent, respectively, but Santos Ltd fell 2.3 per cent, losing for a third session in four since it rejected Harbour Energy's US$10.8 billion buyout offer last week.

Meanwhile, telecom stock Telstra Corporation weighed most on the index, having lost up to 1.4 per cent.

"This is just an extension of the problems Telstra is facing at the moment regarding some holes in their revenue around the mobile division and the National Broadband Network (NBN)," said Mr Conway.

Telstra, which was hit by its second major network service outage in a month, warned earlier in May that its fiscal 2018 results would meet the lower end of its guidance and that challenges would persist into 2019 given the roll out of the NBN.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 0.4 per cent or 33.22 points to 8,611.98 at 0301 GMT.

Healthcare and consumer staple stocks weighed the most on the index. Top drags Fisher & Paykel Healthcare Corporation and a2 Milk lost up to 2.1 per cent and 3.7 per cent, respectively.

REUTERS