Reuters: Hot Stocks: Australia shares rally, RBA comments support banks, NZ hits record

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Australia shares rally, RBA comments support banks, NZ hits record Mar 27th 2013, 06:00 Wed Mar 27, 2013 2:00am EDT (Adds details, comments) SYDNEY, March 27 (Reuters) - Australian shares rose 0.9 percent on Wednesday, their biggest percentage rise in nearly two weeks, led by financials and miners as broader sentiment was underpinned by a record close for Wall Street's Dow Jones Industrial Average. Blue-chip miners BHP Billiton Ltd and Rio Tinto Ltd climbed 0.8 percent and 1.6 percent respectively. National Australia Bank led the financials higher, reversing earlier losses in the session to post gains of 1 percent after the Reserve Bank of Australia's semi-annual review declared the banking sector to be in generally good shape. "There were some things in the RBA's financial stability review today which some people view as being supportive of the banks because they show the resilience of our economy and that the RBA is aware of some of the problems out there," said Damien Boey, equity strategist at Credit Suisse. Australia's financial system was relatively strong with little evidence banks had taken excessive risk to offset sluggish credit growth in order to bolster profits, the RBA noted. The S&P/ASX 200 index climbed 44.8 points to finish the session at 4,995. The benchmark fell 0.8 percent on Tuesday, its lowest close since February 7. "We are pretty neutral on the Australian market at present both from a valuation and technical perspective," said Chris Weston, chief market strategist at IG Markets. Unless the S&P 500 and Nikkei move substantially higher, Weston said, the market will be comfortable around the 5,000 point mark. The market is currently up some 7.4 percent for the year, enjoying a bull run bolstered by a strong earnings season and receding global worries. Banks in Cyprus will remain closed until Thursday and will then be subject to capital controls to prevent a run on deposits. President Nicos Anastasiades said on late Monday that a 10-billion euro ($13 billion) rescue plan approved over the weekend was "painful" but essential to avoid economic meltodwn. "While the market has moved on from (Cyprus) itself, the focus is now more firmly on broader implications," said Weston. Gold miners were moderately weaker after bullion fell for the third session in a row as the return of relative calm in Europe after the deal to bailout Cyprus's banks eased market fears, reducing the metal's safehaven appeal. Newcrest Mining Ltd fell 0.4 percent while rival Regis Resources Ltd lost 2.1 percent, capping broader gains. Oil miners were mixed, with Woodside Petroleum dropping 0.9 percent while Santos rallied 1 percent. Elsewhere, defensives were mostly stronger, blood products maker CSL Ltd added 0.9 percent while top telco Telstra Ltd climbed 1.6 percent. Food retailers Woolworths Ltd rose 0.9 percent while rival Wesfarmers was up 0.5 percent. Utility AGL Energy fell 1 percent. Insurers were firmer; Suncorp Group jumped 2.2 percent, Insurance Australia Group rallied 2.3 percent, and QBE INsurance soared 3.7 percent after the company forecast 2013 gross written premium income of $18.5 billion to $19 billion. Tigers Realm galloped nearly 11 percent higher on news its Amaam coal mining project in Russia was issued a government mining license. Fortescue Metals Group rebounded 4.5 percent to A$3.98 after JP Morgan upgraded its recommendation on the world no.4 iron ore miner's stock to overweight, citing a material upside to the share price on a 12-month view. The battered stock has fallen around 26 percent since mid-February. U.S. stocks rallied on Tuesday, with the Dow climbing more than 100 points to another record close and the S&P 500 coming within striking distance of its all-time closing high, as strong data on home prices and manufacturing orders added to optimsm about the economy. New Zealand's benchmark NZX 50 index finished the day 1.5 percent or 66 points higher, hitting a record 4,412.1. (Reporting by Thuy Ong, additional reporting by Jim Regan; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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