July 7, 2020 / 1:48 AM / a month ago

Australia shares gain ahead of c.bank meeting on upbeat U.S. survey, China hopes

July 7 (Reuters) - Australian shares climbed on Tuesday ahead of the central bank meeting, as a survey showing a resurgent U.S. services industry and hopes of a rebound in China’s economy lifted investor sentiment.

The Reserve Bank of Australia is expected to keep the cash rate at 0.25% and make no changes to policy, but investors will watch for comments on the economic impact from a spike in coronavirus cases.

Boosting sentiment prior to the meeting were a survey showing unexpected growth in the U.S. services sector last month and signs that China’s economy was recovering.

Investors, however, remained concerned about the spike in COVID-19 cases in some states of the United States that has hampered efforts to restart the economy.

The S&P/ASX 200 index rose 0.9% to 6,071.3 in early trade, bouncing back from Monday’s losses.

Strong commodity prices lifted the mining index and gold stocks by more than 2% each.

Gold explorer St Barbara Ltd climbed nearly 8% and was the top percentage gainer on the benchmark, after reporting a jump in fourth-quarter production.

Lithium miner Orocobre Ltd and iron ore miner Fortescue Metals Group Ltd were among the other biggest gainers on the benchmark.

The tech sub-index climbed 1.7% to a record high and was on track for a sixth straight session of gains.

Buy-now-pay-later (BNPL) firm Sezzle Inc’s Australian shares jumped 22.4% to a record high after reporting strong quarterly merchant sales.

Afterpay, another BNPL heavyweight, said it would raise about A$800 million ($559 million) in a bid to capitalize on a surge in online shopping amid lockdowns. Its shares remained on a trading halt.

Financials hit their highest level in nearly a month. Commonwealth Bank of Australia climbed 1.4% after Morgan Stanley said it expected the lender to deliver solid second-half results.

New Zealand’s benchmark S&P/NZX 50 index climbed 0.9% to its highest level in more than four months.

$1 = 1.4300 Australian dollars Reporting by Shruti Sonal in Bengaluru; Editing by Subhranshu Sahu

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