Reuters: Hot Stocks: Australia shares post biggest one-day gain in 5 months

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Australia shares post biggest one-day gain in 5 months Jan 2nd 2013, 06:04 Tweet Share this Email Print Wed Jan 2, 2013 1:04am EST MELBOURNE, Jan 2 (Reuters) - Australian shares rose 1.2 percent in the first trading session of 2013, the biggest one-day percentage gain in five months as U.S. lawmakers agreed to a budget deal that should keep the world's largest economy out of recession. Local shares hit a 19-month high, led by top miners on the rosier outlook for demand for Australian exports such as iron ore. "There is a huge reliance on the U.S. continuing to grow," said Atul Lele, strategist at Credit Suisse "Asia's growth is still to an extent a derivative of U.S. growth, certainly from the export perspective," he said. By a vote of 257 to 167, the Republican-controlled House of Representatives approved a bill to raise taxes on top earners. The benchmark S&P/ASX 200 index, which ended 2012 up 14.6 percent in its best annual gain since 2009, rose 57 points to 4,705.9, according to the latest data. That was the highest since June 1, 2011. Top miners BHP Billiton and Rio Tinto both had their best close since February. BHP rallied 2 percent to A$37.84 while Rio gained 2.4 percent to A$67.62. Fortescue Metals rallied 6 percent to A$4.92. The U.S. budget deal sliced the fiscal drag on the U.S. to about $250 billion from a possible $670 billion, avoiding economic recession. "This is great news for global growth and explains why shares and other growth-related assets such as the Australian dollar are up strongly today," said Shane Oliver, strategist at AMP Capital. AMP forecast U.S. growth of 2.5 percent in 2013 and global growth of around 3.25 percent, underpinning gains in global share markets. "This removal of the fiscal cliff threat provides a positive backdrop for Australia," Oliver said, predicting Australian shares could return around 12 percent this year. Gindalbie Metals Ltd rallied 10 percent to A$0.275 after it shipped the first shipment of magnetite concentrate to China from the Karara iron ore project. The New Zealand market remained closed for a holiday on Wednesday. (Reporting by Miranda Maxwell; Editing by Jacqueline Wong) 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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