Dec 19 Australian shares rose on Monday, with
broad-based gains led by defensives and energy stocks, after the
Australian government offered a solid, if not stellar, financial
outlook and two rating agencies affirmed their triple-A ratings.
Rating agency Fitch, noting Australia's government forecast
a A$10 bln deterioration in its budget deficit over the next
four years, but still hoped to manage a surplus by 2020/21, said
Australia was still consistent with a triple-A
That view was followed some time later by the Moody's rating
agency. Standard and Poors had not commented by 0225 gmt.
There was significant investor concern over reports that
earlier suggested Australia may be downgraded from its top
"It (the Fitch rating affirmation) is probably going to give
a minor confidence boost to the markets. I guess they
(investors) would be looking out for what Moody's and S&P have
to say," said Ric Spooner, chief market strategist with CMC
The S&P/ASX 200 index was 0.7 percent, or 39.17
points, higher at 5,572.1 at 0221 GMT.
The U.S. Federal Reserve tightening monetary policy and
suggesting a more vigorous rate rise cycle for next year had
dampened market spirit last week, sending the benchmark 0.5
percent lower on the week.
Aussie stocks, otherwise, have been in line with a global
inflation rally that was triggered in October.
Defensives, considered a safe bet during periods of
uncertainty, steered the rally. Utilities, telcos and healthcare
stocks were the biggest gaining sectors.
Natural gas infrastructure business APA Group, up
2.4 percent, received support from higher oil prices.
Oil major Woodside Petroleum was 0.8 percent
higher, while Oil Search Ltd and Santos Ltd
each added about 0.6 percent.
Financial stocks, often the reapers of reflation trade,
posted gains with the financial index 0.3 percent
higher. The "Big Four" major banks gained in the range of 0.1 to
Basic materials, undeterred by the 14-year dollar high,
jumped on to the bandwagon. Major miners Rio Tinto and
BHP Billiton were over 1 percent higher.
New Zealand's benchmark S&P/NZX 50 index was 0.5
percent higher at 6,791.55 led by defensives and consumer
Bank of New Zealand-Business NZ's performance of services
index (PSI) showed 1.3-point growth New Zealand's services
sector in November to 57.9, making November one of the strongest
months of activity in 2016. Meanwhile, a a Westpac survey showed
consumer confidence rising 5.2 percent in the fourth quarter.
Building materials manufacturer Fletcher Building
and SKY Network Television Ltd were each 1.7 percent
Infrastructure firm Infratil and electricity
generator Genesis Energy were the biggest gainers on
the benchmark, adding 3.5 percent and 2.5 percent respectively.
(Reporting by Rushil Dutta; Additional reporting by Anusha
Ravindranath in Bengaluru)