July 4, 2019 / 6:42 AM / 16 days ago

Australian shares end at over 11-yr peak on rate-cut hopes, NZ at record high

* ‘Big four’ bank stocks push up the index

* Local rate-cut hopes soar after weak retail sales data

* NZ inches up to third straight record close (Updates to close)

July 4 (Reuters) - Australian shares ended at their highest level in over 11 years on Thursday as expectations of local and U.S. interest rate cuts drew investors to riskier assets.

The S&P/ASX 200 index rose 0.5% or 32.50 points to 6,718.0 by the close of trade, its fourth straight session of gains and the strongest close since November 2007. The benchmark rose 0.5% on Wednesday.

Disappointing economic readings in the United States reinforced views the Federal Reserve will start to cut rates as early as this month, while local stocks were cheered by increased bets for a third Australian rate cut in 2019 after May retail sales data disappointed.

Policy easing makes government debt less attractive, and drives money into higher yielding plays like equities.

Financial stocks, the largest sector in the ASX 200, closed 1% higher, with most support coming from the big four banks, which ended up more than 1%. Australia and New Zealand Banking Group led gains amongst its peers, adding more than 1.3% for the day.

ANZ was the only one of its peers to fully pass on Tuesday’s central bank rate cut to its customers. While lower interest rates threaten their margins, banks also stand to gain from increased lending volumes, particularly in the real estate sector.

Goodman Group and Scentre Group, which are among the largest stocks in the real estate sector, closed 0.6% and 1.8% higher, respectively.

Satellite service provider Speedcast International was the largest gainer on the ASX 200. The stock closed nearly 10% higher after being heavily sold off over the past two sessions.

Bucking the trend, mining stocks ended 0.5% lower, dragged primarily by profit taking in heavyweights BHP Group , Rio Tinto, and Fortescue Metals Group .

The three stocks ended 0.5% to 2% lower, having gained substantially over past few sessions amid record-high iron ore prices.

New Zealand stocks ended at a third consecutive record close, driven by the local stocks of Australian banks. The benchmark S&P/NZX 50 index rose 0.1% or 13.85 points to finish the session at 10,558.28.

Westpac Banking Corp’s New Zealand shares ended 0.5% higher, while those of ANZ ended up 1.4%. (Reporting by Ambar Warrick in Bengaluru; Editing by Kim Coghill)

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