Reuters: Hot Stocks: Australia shares rally to 21-month high, banks strong

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Australia shares rally to 21-month high, banks strong Jan 29th 2013, 05:50 Tweet Share this Email Print Tue Jan 29, 2013 12:50am EST (Adds details, comments) SYDNEY, Jan 29 (Reuters) - Australian shares rallied 1.1 percent to a 21-month high led by financial stocks when trade resumed on Tuesday after a three-day holiday weekend. Westpac Banking Corp helped lead the financial sector, soaring 2.4 percent to reach a 3-year high of A$28.22. Australia's no.1 lender, the Commonwealth Bank of Australia jumped 1.8 percent to reach an all-time closing high of A$64.73. "Improving equity markets, falling bad debts combined with an improving global outlook in a low interest rate environment has seen our banks clearly sought after," said Ben Taylor, sales trader at CMC Markets. The S&P/ASX 200 index finished the day 53.8 points higher at 4,889. The benchmark finished up 25 points at 4,835.2 on Friday. The market was closed on Monday for the Australia Day holiday. "It seems that a lower interest rate environment is starting to improve confidence among the Australian business community. Mix this in with the China rebound and we have a sharp rise in confidence," said Taylor. Insurance companies fell as floods and storms hit Queensland and New South Wales states. QBE Insurance Group Ltd lost 2.7 percent. Suncorp dropped 1.9 percent after the insurer said it had received 4,500 claims related to Queensland's floods and storms but said it was prepared for the financial impact. Insurance Australia Group Ltd bucked the trend, edging up 0.2 percent. Lakes Oil surged 50 percent after mining magnate Gina Rinehart bought a major stake in the oil and gas explorer. Defensives finished the day firmer. Blood products maker CSL Ltd rallied 3.7 percent while Australia's top telecommunications provider Telstra jumped 2 percent to a five-year high of A$4.67. "With defensive stocks looking more and more bloated, and with the end of the month fast approaching, fund managers may see value in reweighing portfolios from equities to other instruments due to their stellar performance over the month," said Stan Shamu, market strategist at IG Markets. Global iron ore miners were slightly firmer. BHP Billiton Ltd inched up 0.2 percent while rival Rio Tinto Ltd was up 0.1 percent. More restocking by Chinese steelmakers and limited spot cargoes could nudge iron ore prices higher this week, although gains will be capped with buyers not keen on chasing pricey cargoes and sellers willing to wait until after the February Lunar New Year holiday. New Zealand's benchmark NZX 50 index slipped 4.1 points, ending the day at 4,200.3. (Reporting by Thuy Ong; Editing by) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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