Banks lead Australia shares higher, NZ at record

[BENGALURU] Australian shares rose on Friday, led by banks and mining companies, as a cautious European Central bank policy decision pushed the US dollar higher against other currencies.

The ECB signalled on Thursday it would retain interest rates at record lows well into next year, longer than some market watchers had expected.

That overshadowed the ECB's pledge to end its massive bond purchase scheme by the end of 2018 in its most decisive step yet towards winding down crisis-era stimulus.

"(ECB President) Mario Draghi, in Europe, talking about tapering, pushed the US dollar higher and the Aussie dollar is a beneficiary of that... the Aussie dollar is significantly weaker against the US dollar and that's given a bit of a boost to all the equity markets," said Damian Rooney, director of equity sales at Argonaut.

By 0300 GMT, the S&P/ASX 200 index was up 1.3 per cent or 78.6 points to 6,095.2. The benchmark had declined 0.1 per cent on Thursday.

Financial stocks snapped four falling sessions to rise as much as 1.3 per cent. The "Big Four" banks climbed between 0.9 per cent and 1.7 per cent.

Australia & New Zealand Banking Group said on Thursday it will cut about 60 staff positions from its markets division across the world due to "challenging" conditions and "ongoing headwinds".

Material stocks also rose, with top miners BHP Billiton and Rio Tinto up 0.9 per cent and 1.3 per cent, respectively.

BHP on Thursday approved spending US$2.9 billion to develop its Western Australian South Flank iron ore project in the central Pilbara, and said the quality of the mineral would raise the overall grade of its regional output.

Energy stocks Woodside Petroleum and Santos advanced as much as 1.9 per cent and 2.6 per cent each.

Beach Energy is looking to buy local oil and gas company Quadrant Energy according to media reports, sending Beach shares up as much as 4.4 per cent.

Elsewhere, Sirtex Medical Ltd added up to 5.3 per cent to its best level since October 2016 after it chose a takeover offer of US$1.4 billion from Chinese bidders on Thursday, rejecting one from US company Varian Medical Systems.

Qantas Airways was the top drag on the main index, falling 0.5 per cent after one of its A380 jets suffered a rare "jolt" from wake turbulence.

New Zealand's benchmark S&P/NZX 50 index touched its third consecutive intraday record and was 19.49 points higher at 8,997.67 at 0211 GMT.

Dairy products maker a2 Milk was the biggest boost to the index, up 1.8 per cent.

REUTERS