Dec 20 Australian shares gained modestly on
Tuesday as the Reserve Bank expressed cautious optimism for the
country's economic prospects, although it also showed some
concerns over low wage growth.
Minutes of the Reserve Bank of Australia's last policy
meeting showed that the central bank took its optimistic view
despite a run of soft data that led to a contraction in the
third quarter, implying it was done cutting interest rates for
Most sectors, led by financials, rose shadowing Wall Street
gains as a certain amount of year-end optimism also kept
The S&P/ASX 200 index was 0.6 percent, or 35.42
points, higher at 5,597.5 at 0210 GMT.
The Australian government on Monday had forecast a A$10
billion deterioration in its budget deficit over the next four
Major rating agencies Fitch and Moody's, however, placated
investor fears by noting the forecast was consistent with a
triple-A rating, while Standard and Poor said the budget update
had no immediate impact on its AAA rating.
The benchmark closed 0.5 percent higher in the previous
session led primarily by financials.
"Investors are identifying a little bit of value in that
space (financial sector) still," said Ben Le Brun, a market
analyst with Optionsxpress.
"Especially if the interest rate cycle turns here in
Australia and we start to see interest rate hikes, that is going
to be good for the net interest margins."
Australia's financial index, whose constituents have
tracked gains by their U.S. peers ever since the election of
Republican Donald Trump as U.S. President, has gained 14 percent
since Nov. 9.
The 'Big Four' banks gained around 1 percent each.
Consumer stocks and utilities were among the biggest
gainers, with retailer Wesfarmers 1.1 percent higher.
AGL Energy and APA Group added 2.4 percent
and 2 percent each.
Basic materials and energy stocks, on the other hand,
suffered from weakened commodity and placid oil prices.
Mining giants BHP BIlliton and Rio Tinto
were 0.8 percent and 0.4 percent lower respectively.
Oil major Woodside Petroleum was 1 percent weaker.
New Zealand's benchmark S&P/NZX 50 index was up 0.4
percent in its third straight session of gains, at 6,811.52.
The gains were led by financials and healthcare sectors with
Westpac Banking Corp gaining over 1 percent , its
highest in 7 months, while Australia and New Zealand Bank
gained 0.8 percent in its fifth straight session of
Ryman Healthcare Ltd entered its third straight
session of gains, rising as much as 3.05 percent, while Fisher &
Paykel Healthcare Corporation Ltd gained 0.24 percent.
(Reporting By Eric Meijer)