Sept 19 (Reuters) - Australian shares inched up on Tuesday, with financials bolstered by record highs on Wall Street ahead of a Federal Reserve meeting, while the telecom sector and large-capped material stocks also lent support.
At a two-day meeting beginning Tuesday, the Fed is expected to take another step toward policy normalisation and announce plans to begin unwinding its $4.2 trillion portfolio of Treasuries and mortgage-backed securities.
“Market expectation is that they (Fed) won’t raise rates and they won’t say anything new on their timeline or their expectations of when they will raise rates,” said Christopher Conway, head of research and trading at Australian Stock Report.
The S&P/ASX 200 index rose 0.2 percent, or 12.1 points, to 5,732.7 at 0248 GMT. The benchmark rose 0.5 percent on Monday.
The benchmark financial index rose to its highest in nearly four weeks, with most banks in the “Big Four” up in the range of 0.7 percent to 1 percent. National Australia Bank and Australia and New Zealand Banking Group touched multi-week highs, while Commonwealth Bank of Australia was marginally lower.
Meanwhile, TPG Telecom was the top gainer on the index, rising as much as 10 percent, its biggest intraday percentage gain in over two-and-a-half years, after full-year net profit climbed 9 percent to beat analysts’ forecasts.
The company, however, slashed its final dividend and warned that pre-tax profit would fall in the current fiscal year due to rising competition.
“The markets obviously loved the results today,” said Conway. “The telecom sector is a very challenging sector at the moment - Telstra has also cut their dividend, so I think dividends being cut in that sector is something that wasn’t unexpected.”
The Australian telecom index, which has fallen 28.7 percent this year, rose as much as 0.9 percent after TPG’s results.
In the materials sector, miners BHP Billiton and Rio Tinto rose as much as 1.5 percent and 1.2 percent, respectively, on the back of upbeat aluminium and copper prices.
Meanwhile, minutes of the Reserve Bank of Australia’s September meeting showed the central bank has turned more upbeat on the economic outlook led by an improving labour market, although it remained worried about rising household debt and a strong local dollar.
New Zealand’s benchmark S&P/NZX 50 index edged up 0.1 percent, or 4.05 points, to 7,762.76 at 0248 GMT.
Synlait Milk climbed 5.7 percent to a record high after reporting a 12 percent rise in full-year net profit after tax.
However, gains on the index were capped by a 1.8 percent drop in medical device manufacturer Fisher & Paykel Healthcare Corporation Ltd.
Reporting by Chris Thomas in Bengaluru; Additional reporting by Aditya Soni; Editing by Jacqueline Wong