Reuters: Hot Stocks: Australia shares rally ahead of rate decision; retail data support

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Australia shares rally ahead of rate decision; retail data support Mar 5th 2013, 01:18 Mon Mar 4, 2013 8:18pm EST (Adds details, comments, stocks on the move) SYDNEY, March 5 (Reuters) - Australian stocks rallied 1.5 percent in late morning trade on Tuesday, with financial stocks leading the gains ahead of an interest rate decision by the central bank, while retail stocks rallied as data showed consumer spending ticked up in January. The outcome of the Reserve Bank of Australia(RBA)'s March meeting will be announced at 0330 GMT, with nearly all economists in a Reuters poll forecasting no change to a record-low 3 percent cash rate. With a cut unlikely, investors would be keen to see the RBA's comments in its accompanying statement, analysts said. "The market is looking for some more reassuring signs for the Australian economy, whether that's the sign it could bottom out, or that's the central bank continuing to talk about...'look, we can ease if we need to,'" said Credit Suisse equity strategist Damien Boey. The S&P/ASX 200 index was up 76.7 points at 5,087.2 at 0054 GMT. The benchmark fell 1.5 percent on Monday to its lowest close since Feb. 26. Financial stocks led the rally, with the country's biggest lender Commonwealth Bank of Australia gaining 2.3 percent, while Westpac Banking Corp jumped 2.7 percent. Data released on Tuesday showed retail sales for January rose a bigger-than-expected 0.9 percent from the previous month. Retail stocks rallied on the back of the data, as top supermarket chain Woolworths Ltd rose almost 3.0 percent and department store Myer Holdings Ltd advanced 2.9 percent. Miners retreated despite a rebound in metal prices. BHP Billiton Ltd inched down 0.1 percent and Fortescue Metals Group Ltd lost 1.6 percent. Rio Tinto Ltd pared earlier losses and edged up 0.4 percent. Investors were concerned about China's new curbs on housing prices, which would likely cap demand for steel and raw materials, Boey said. "Any curbs there will be bad news," he said. "Historically the best thing to look at for steel production is to look at what's happening to China's house prices." Defensive stocks had a better run, with Australia's flagship phone company Telstra Corp Ltd adding 1.3 percent. New Zealand's benchmark NZX 50 index rose 0.2 percent to 4,262.7. STOCKS ON THE MOVE * Coal seam gas producer Westside Corp Ltd soared 6.7 percent to A$0.32, after it said it continued to talk with its bidder and that the board decided to conclude the process in the near term. (0057 GMT) * Vessel maker Austal Ltd surged 9.5 percent to A$0.64, its biggest one-day percentage gain in five weeks, 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. (0057 GMT) (Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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