Dec 16 Australian shares were sluggish on Friday
afternoon with financials supporting the market although a
stronger U.S. dollar hit gold and oil prices, sending materials
and energy stocks lower.
The dollar reached 14-year highs against a basket of major
currencies on the back of the U.S. Federal Reserve's rate hike
and signal of three more rate hikes in 2017. An expected boost
to U.S. economic growth under President-elect Donald Trump also
underpinned the greenback.
The S&P/ASX 200 index was flat at 5537.1 points as
at 0137 GMT as gains in financials and industrials were offset
by losses in gold and oil stocks.
"Markets are betting on the underlying strength of the U.S.
economy and clearly the interest rate direction given by Federal
Reserve," said James McGlew, executive director of corporate
stock-broking at Argonaut.
The benchmark gold index slumped to its lowest in
over 8 months, falling as much as 6.1 percent.
The index was dragged down by Newcrest Mining, the
biggest stock on the index by market value, which fell over 6
The metals and mining index fell over 0.7 percent
with declining iron ore prices adding to the pressure as Chinese
iron ore futures dropped for a second session on Thursday.
Mining giant BHP Billiton, which also has
significant oil interests, fell 0.2 percent.
Fortescue Metals, however, was one of the top
gainers on the metals index, as it reassured investors with a
further $1 billion repayment of a 2019 senior secured credit
Oil stocks, which rallied hard earlier this week after
global producers struck a deal to cut output, tumbled as a
stronger greenback pressured demand for dollar-denominated
Woodside Petroleum, bellwether of the Australian
oil sector, was 1 percent lower. Beach Energy fell to
over two-week lows, losing 2.4 percent.
On the brighter side, financial stocks posted gains with the
benchmark financial index rising as much as 0.25
percent. Commonwealth Bank of Australia was among the
top gainers, up 0.5 percent.
Financials and industrials at home have tracked a rally in
their U.S. peers - the biggest beneficiaries Trump's election
win as markets bet the new administration will boost spending on
infrastructure, cut taxes and simplify regulations.
Industrials led the gains, driven up by a nearly 2 percent
rise in construction firm CIMIC Group's shares.
New Zealand's benchmark S&P/NZX 50 index was up 0.7
percent, or 49.56 points, at 6798.18.
The index was supported by utilities and industrials with
Meridian Energy rising 1.8 percent and Auckland
International Airport gaining 1.6 percent.
(Reporting by Susan Mathew in Bengaluru; additonal reporting by
Suhail Hassan Bhat; Editing by Shri Navaratnam)