(Updates to close)
March 29 Australian shares extended gains to
near two-year closing highs on Wednesday, backed by optimism
over earnings for the financial sector after the country's big
four banks raised their home loan rates recently.
The S&P/ASX 200 index finished at 0.9 percent higher
or 52.26 points to 5873.5, its strongest level since mid-April
The market started off with a good tailwind from Wall
Street's cheer following solid U.S. data showing consumer
confidence at a 16-year high.
Financials accounted for most of the gains with big
four banks rising between 1 percent to 1.3 percent.
Deutsche Bank analysts on Monday increased their future cash
earnings forecasts for the banks by 2 to 3 percent due to the
mortgage rate hikes, even though they expected demand for loans
from housing investors to decrease as a result.
The positive earnings expectations for the banks appear to
have helped feed investor demand.
Fitch Ratings said on Wednesday that the increases in home
loan rates should help cool growth in lending to more vulnerable
buyers, but added that banks still face risks from high
household debt and an overheated property sector,
Corporate activity was also a focus on the day. Shares of
media company Fairfax Media jumped as much as 7.5
percent to the highest level since 2011 after the Australian
Financial Review reported that U.S. private equity group, TPG
Capital, is considering making a takeover offer.
New Zealand's benchmark S&P/NZX 50 index gained
nearly 1 percent or 68.34 points to finish the session at
7133.57. It marked the highest close in over a week, helped by
gains in materials and healthcare stocks.
Air New Zealand rose as much as 3.8 percent to
touch its highest in nearly 1 year.
(Reporting by Urvashi Goenka in Bengaluru; Editing by Shri