Australia shares post biggest one-day gain in 6 weeks, led by banks

Australia shares post biggest one-day gain in 6 weeks, led by banks
Business & Markets 2013
Written by Reuters
Friday, 23 August 2013 11:15

23/08/13 10:18:24
SYDNEY (Aug 23): Australian shares rose 1.2 percent on Friday, their biggest one- day jump in six weeks, lifted by the financials sector after Wall Street rose overnight and a survey showed stronger manufacturing performance in China, Australia's top export market.

Better-than-expected earnings reports also bolstered market confidence.

Financials, which have outperformed the broader market this year, advanced their run higher as investors continued to chase high dividends. Westpac Banking Corp climbed 2.1 percent while Commonwealth Bank of Australia added 0.9 percent.

Miners were firmer as surveys showed better-than-expected growth in the euro zone and a rebound in China's vast manufacturing sector.

BHP Billiton Ltd and Rio Tinto Ltd rallied 1.1 percent and 1.6 percent. Gold miner Newcrest Mining Ltd jumped 4.5 percent and Regis Resources Ltd soared 5.9 percent.

The S&P/ASX 200 index rose 61.1 points to 5,136.8 by 0146 GMT. The benchmark fell 0.5 percent on Thursday, and has been hovering at the 5,100 point level since bouncing back from a year-to-date low of 4,632.3 hit on June 25.

The Australian benchmark outperformed emerging markets in the region this week, rising 0.4 percent compared with a 7 percent drop in the Thomson Reuters South East Asia Index.

Emerging markets have been battered by bond yields in the U.S. rising on fears of an imminent cutting of stimulus by the Federal Reserve.

"Few people are expecting the Fed to actually look at pushing rates up until late 2014, so this unwinding that emerging markets are experiencing is preemptive and will cause a buying vacuum," said Scott Schuberg, CEO of Rivkin Securities.

In earnings reports, shares in Crown Ltd soared 7.3 percent to A$14.56 -- its highest in nearly six years after beating analyst forecasts as VIP gaming revenue increased 3.3 percent.

Mirvac jumped 3.2 percent to three-week highs despite posting a 10 percent drop in revenue, as the company said the outlook for its development division was strong and on track to deliver earnings in the next three years.

Lend Lease climbed 2.2 percent after a rise in the company's annual profit as its Barangaroo operations in Sydney offset weakness in other housing and CONSTRUCTION [] markets.

"The biggest theme to FY13 reporting season is consolidation," said Evan Lucas, IG's market strategist in a note to clients.

"Companies across every sector have stated very clearly that the sales environment has been 'challenging' and that is expected to continue in FY14."

Overnight, U.S. stocks closed higher on Thursday, aiding Australia's benchmark, in a session marred by technical troubles halting Nasdaq trade for three hours.

New Zealand's benchmark NZX 50 index rose 0.1 percent or 5.8 points to 4,535.6. - Reuters