Reuters: Hot Stocks: Australian shares rise on relief over Cyprus deal; banks strong

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Australian shares rise on relief over Cyprus deal; banks strong Mar 25th 2013, 06:07 Mon Mar 25, 2013 2:07am EDT (Adds details, comments) SYDNEY, March 25 (Reuters) - Australian shares rose 0.5 percent on Monday, led by strength in the banking sector, as investors took heart from Cyprus reaching a last-ditch agreement with international lenders for a 10 billion euro bailout, though the market came off highs once details of the plan became clear. Under the accord, Cyprus will shut down its second-largest bank, inflicting heavy losses on uninsured depositors, including wealthy Russians. "It's still very hard to see how that's going to stop the contagion that people keep talking about," said IG Markets strategist Evan Lucas, noting this deal had set a precedent for other European nations that were struggling for a bailout. "It means we've not seen the end of this kind of issue," Lucas said. The S&P/ASX 200 index gained 22.9 points to close at 4,990.2, coming off an intraday high of 5023.2. The benchmark inched up 0.2 percent on Friday, but fell 3 percent for the week. New Zealand's benchmark NZX 50 index shed 0.1 percent to 4,340.7. Strong financials led the local market. Westpac Banking Corp gained 1.7 percent, making it the biggest winner among the Big Four banks, while Australia's biggest lender, Commonwealth Bank of Australia, rose 0.5 percent. "There is still a large part of the market that is happy to just park money in high-yielding companies and sectors like the banks, where the perception of safety in yield provides quite good cover in terms of avoiding any real downside in the market," said Greg Fraser, head of research at Kimber Capital. Blue-chip miners ended mixed, as BHP Billiton Ltd retreated from earlier gains and edged down 0.1 percent. Rio Tinto Ltd rose 0.6 percent, while Fortescue Metals Group Ltd gained 1.8 percent. But in the short term miners were still vulnerable, given the volatility of demand from top market China, said Shane Oliver, head of investment strategy at AMP Capital Investors. "They are still very vulnerable to how China performs. On that front, there is still some uncertainty," Oliver said. Australian builder Leighton Holdings Ltd jumped 4.3 percent after it appointed board member Bob Humphris as its new chairman to replace Stephen Johns, who quit in a row with majority shareholder Hochtief. Mall operator Westfield Group gained 1.7 percent, after it said it had sold a 49.9 percent stake in six Westfield regional shopping centres in the U.S. state of Florida to joint venture partner O'Connor Capital Partners. Karoon Gas Australia Ltd dived 8.9 percent, making it the biggest percentage loser in the index, after it said it had agreed to sell a 35 percent interest in its oil exploration blocks to Canada's Pacific Rubiales Energy Corp. Engineering contractor Forge Group Ltd slid 2.9 percent after its biggest shareholder Clough Ltd sold 30.9 million Forge shares for A$187 million. Clough plunged 4.0 percent. (Reporting by Maggie Lu Yueyang; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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