November 7, 2019 / 1:52 AM / 9 days ago

Banking stocks lift Australia market, NZ edges lower

* Financials mark best day in over 3 weeks

* Weaker oil prices weigh on energy firms

* James Hardie Industries touches record high

By Shriya Ramakrishnan

Nov 7 (Reuters) - Australian shares rose on Thursday as gains in financials, led by the country’s third largest lender National Australia Bank, eclipsed losses in the mining and energy sectors.

The S&P/ASX 200 index rose 0.7% or 43.1 points to 6,703.3 by 0122 GMT, recovering after a 0.6% loss on Wednesday.

Powering the benchmark, financial stocks advanced 0.9% to mark their best day in more than three weeks. The “Big Four” banks added between 0.2% and 1.9%. Shares of National Australia Bank rose as much as 3% and was among the top gainers on the ASX 200, even after the lender reporting a 10.6% drop in annual cash earnings and cutting its dividend to 83 Australian cents per share. “It is purely relief that they didn’t do a capital raise or cut their franking...the dividend cut was already priced in anyway. The yield is still quite compelling in an environment where you have record low interest rates,” Henry Jennings, senior Analyst and portfolio manager at Marcustoday Financial Newsletter said.

To buttress its capital position, NAB said it would raise about A$1.55 billion in new shares via a partially underwritten dividend reinvestment plan.

Jennings the fact NAB didn’t touch with its franking credits like Australia and New Zealand Banking Group or raising money through an institutional placement - as Westpac Banking Corp did on Monday - allayed investor fears.

Energy stocks dropped 1%, after a much larger-than-expected build in U.S. crude inventories and a report on a possible delay in the signing of a U.S.-China trade deal pressured global crude prices.

Santos Ltd, the country’s no. 2 independent gas producer, shed 1.6%, while oil and gas explorer Cooper Energy slumped 2.6%.

Miners also posted a subdued performance, with the sub-index falling as much as 0.5%. Mining behemoth BHP Group and Fortescue Metals Group, the world’s fourth largest iron ore miner, fell 0.8% and 0.6% each.

Gold stocks were poised to snap a two-day losing streak, as doubts about a U.S.-China breakthrough boosted demand for the bullion, which is seen as a safe-haven during times of economic or political uncertainty. Newcrest Mining, the country’s largest gold producer strengthened 1.7%, while Northern Star Resources added 1.2%.

James Hardie Industries was among the biggest gainers on the benchmark index, soaring as much as 9.5% to a record high. The world’s largest fibre cement maker forecast higher earnings in fiscal 2020 amid an improving U.S. housing market. Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index edged down 0.1% or 8.64 points to 10,750.54. Electricity retailer Trustpower Ltd skidded 2.5%, while dairy company Synlait Milk fell 2.1%.

Reporting by Shriya Ramakrishnan in Bengaluru Editing by Shri Navaratnam

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