Reuters: Hot Stocks: Australia shares rise as banks and retailers advance; upbeat data support

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Australia shares rise as banks and retailers advance; upbeat data support Mar 5th 2013, 06:20 Tue Mar 5, 2013 1:20am EST (Adds details, comments) SYDNEY, March 5 (Reuters) - Australian stocks ended 1.3 percent higher on Tuesday, buoyed by gains for financials and retailers after strong retail sales and export figures supported an upbeat outlook for the economy. A widely expected decision by the Reserve Bank of Australia (RBA) to hold its main cash rate steady at a record low of 3.0 percent on Tuesday led to a pause in buying, with the Australian dollar edging higher as the market had priced in a slender chance of a cut. The RBA reiterated that there was room to cut if needed given a benign outlook for inflation. "While the statement maintained a mild easing bias, on the whole we felt there was nothing in the narrative (to give) an impression it was looking to cut anytime soon," said IG Markets chief market strategist Chris Weston in a note to Reuters. The S&P/ASX 200 index trimmed gains after the rate decision, but still ended the day 64.9 points higher at 5,075.4, according to the latest data. It fell 1.5 percent on Monday to its lowest close since Feb. 26, partly hurt by worries about slowing growth in China. New Zealand's benchmark NZX 50 index rose 0.4 percent to 4,269.2. Financial stocks led the rally, with the country's biggest lender Commonwealth Bank of Australia gaining 2.3 percent, while Westpac Banking Corp jumped 2.9 percent. "Investors are focusing on things that have served very well over the last few months, that is buying stocks with reliable income strength and dividend yields," said CMC Markets chief market strategist Michael McCarthy in Sydney. Data released on Tuesday showed retail sales for January rose a bigger-than-expected 0.9 percent from the previous month, more than twice the gain forecast and the biggest increase in seven months. Retail stocks advanced on the back of retail data, as top supermarket chain Woolworths Ltd pushed higher 3.1 percent and department store David Jones Ltd jumped 3.5 percent. Other figures out on Tuesday showed the country's current account deficit unexpectedly narrowed to A$14.7 billion last quarter, under forecasts of A$15.35 billion. A sizable increase in resource shipments meant net exports, or exports minus imports, added a solid 0.6 percentage point to economic growth, on top of the lift from government spending. But big miners lagged behind, with BHP Billiton Ltd losing 0.5 percent and Rio Tinto Ltd shedding 0.1 percent. Analysts said investors were still concerned about China's new curbs on housing prices, which would likely cap demand for steel and raw materials. "Any curbs there will be bad news," said Damien Boey, an equity strategist at Credit Suisse based in Sydney. "Historically the best thing to look at for steel production is to look at what's happening to China's house prices." Australia's flagship phone company Telstra Corp Ltd gained 1.1 percent. Australian agricultural chemicals company Nufarm Ltd dived 12.1 percent to a 8-1/2 month low, after it lost its exclusive right to sell Monsanto's Roundup herbicide in Australia and New Zealand. Vessel maker Austal Ltd surged 12.9 percent to its one-week high, after it said it had won a $682 million contract to two more of its aluminum-hulled, trimaran design LCS ships for the U.S. navy. (Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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