* Benchmark closes at 6,300 level for first time since Jan 2008
* BHP U.S. shale asset sale lifts index
* AMP flags financial impact from Royal Commission inquiry (Updates to close)
By Nikhil Nainan
July 27 (Reuters) - Australian shares closed the week at their highest level since early 2008, with Friday’s trading buoyed by news that BHP, the world’s biggest miner, had agreed to sell its U.S. shale assets and promised to return all proceeds to its shareholders.
BHP provided a strong lift for the S&P/ASX 200 index , which closed 0.9 percent higher at 6,300.2, enough to score a second straight week of gains.
Nearly a year after putting its U.S. shale assets up for sale and after months of market anticipation, BHP agreed to sell its shale oil and gas assets for $10.8 billion, with BP Plc picking up most of them.
The better than expected sale price and the resulting expectations of an enticing future share buy-back provided a fillip to shares, which rose over 2 percent to their to their highest in more than two months.
“I think it (the deal) has certainly increased the likelihood of a buy-back and buy-backs have certainly been something that’s been driving markets globally,” said Damien Rooney, director of equity sales at Argonaut.
In contrast to BHP’s fortunes, shares of AMP slid over 5 percent to their lowest in nearly 15 years after the firm warned costs stemming from an inquiry into financial sector misconduct would eat into first-half profits.
The wealth manager had flagged A$530 million ($391.46 million)of costs it would to use to compensate customers for poor advice, among other things, while saying underlying net profit for the first-half would fall to between A$490 million and A$500 million, lower than a year prior.
The Royal Commission has exposed systemic wrongdoing at AMP, wiping A$5.5 billion from its market value since it began in February, with Friday’s trading update providing an early financial impact from the inquiry.
Nonetheless, financials held up as the top constituents on the benchmark led gainers.
The ‘Big Four’ banks gained within a range of 0.7 percent to 1.6 percent, with Australia and New Zealand Banking occupying the top spot among the banks.
New Zealand’s benchmark S&P/NZX 50 index climbed 0.7 percent, or 63.68 points to finish at 8,996.16.
Auckland Airport and Fisher & Paykel Healthcare Corporation Ltd boosted the index, rising 2.4 percent and 1.4 percent, respectively. ($1 = 1.3539 Australian dollars) (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Shri Navaratnam)