Reuters: Hot Stocks: Australia shares recover on RBA optimism; down 0.3 pct on week

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Australia shares recover on RBA optimism; down 0.3 pct on week Feb 22nd 2013, 06:15 Fri Feb 22, 2013 1:15am EST (Adds details, comments) SYDNEY, Feb 22 (Reuters) - Australian shares recovered 0.8 percent on Friday from their steep fall in the previous session, led by financials as upbeat comments from the central bank governor offset concerns about the U.S. and euro zone economies. In a half-yearly appearance before Parliament's economics committee, Reserve Bank Governor Glenn Stevens gave an optimistic account of the Australian economy, but noted the RBA could cut its cash rate if needed - given a benign inflation outlook. "They (the RBA) appear to have had the effect of reassuring the market," said CMC Markets chief market strategist Michael McCarthy. "The market appeared to take comfort from that, despite the fact he did point out the unusual conditions and appeared to be expressing concern about the global low interest rate environment," McCarthy added. Financials underpinned the market, led by a 1.4 percent rise in National Australia Bank Ltd. Top lender Commonwealth Bank of Australia gained 1.1 percent. But top miners dragged on the index with BHP Billiton Ltd losing 0.8 percent and Rio Tinto Ltd falling 0.9 percent. The benchmark S&P/ASX 200 index climbed 38.0 points to 5,018.1, but ended the week 0.3 percent lower. The ASX 200 plunged 2.3 percent on Thursday, its biggest one-day percentage fall since last May, on worries the U.S. Federal Reserve could slow or stop its monetary stimulus programme. The Australian market has risen around 8.0 percent this year on receding euro zone and U.S. concerns, and on a better-than-expected earnings season. "Clearly there is underlying strength in Australian equities, with the market seeing yesterday's sell-off as overdone," said Chris Weston, chief market strategist at IG Markets. Gold and base metals had a strong run this session, with Evolution Mining Ltd and Medusa Mining Ltd rising 12.6 percent and 13.7 percent respectively, making them top gainers in the ASX 200 index. Newcrest Mining Ltd, Australia's biggest listed gold miner, also rose 1.6 percent, after gold inched up as lacklustre U.S. data bolstered expectations that the Federal Reserve's monetary stimulus would stay in place. Defensives supported the local bourse. Food retailer Woolworths Ltd climbed 1.2 percent while rival supermarket giant Wesfarmers Ltd ended 1.0 percent higher. Telco Telstra Corp Ltd tacked on 1.3 percent, and blood products maker CSL Ltd jumped 1.8 percent. Struggling surfwear company Billabong Ltd tumbled 5.5 percent to a six-week low after it posted a first-half net loss of A$536.6 million and lowered its full year outlook. Transpacific Industries Group, Australia's biggest waste management company, surged 13.2 percent after posting a 42.1 percent rise in its half-year underlying net profit. New Zealand's benchmark NZX 50 index rose 1.1 percent to 4,214.6. (Reporting By Maggie Lu Yueyang; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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