Reuters: Hot Stocks: Australia shares rally, financials gain as jobs data raise chance of rate cut

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Australia shares rally, financials gain as jobs data raise chance of rate cut Apr 11th 2013, 06:45 Thu Apr 11, 2013 2:45am EDT (Adds details, comments) SYDNEY, April 11 (Reuters) - Australian shares rose 0.8 percent on Thursday, underpinned by the financial sector as local data showed unemployment rose, increasing the chance of an interest rate cut, and record overnight highs for U.S. stocks boosted risk appetite. The S&P/ASX 200 index added 39.1 points to finish at 5,007.1. The index fell 0.2 percent on Wednesday. Buying, especially in interest-rate sensitive stocks, picked up after data showed Australia's employment fell a steeper-than-expected 36,100 in March, raising the odds of another rate cut by the Reserve Bank of Australia. Westpac Banking Corp rallied 1.9 percent, Australia and New Zealand Banking Group climbed 1.6 percent, and National Australia Bank advanced 1.3 percent. . The fall in employment was seen as payback for a massive 74,000 increase the month before, while the jobless rate rose to its highest in more than three years at 5.6 percent. "The RBA is likely to keep its easing bias with no action until the pressure of rising unemployment builds or a lack of non-mining investment develops," said Ben Taylor, sales trader at CMC Markets. The mood in the market was already buoyed by U.S. stocks climbing 1 percent on Wednesday with both the Dow Jones Industrial Average and S&P 500 ending at historic highs . Juliette Saly, stock market analyst at Commonwealth Securities, said it was encouraging to see the local market trading around the 5,000-point mark. "Our forecast for the All Ordinaries only midyear is 5,200, so in order to get to that point and consolidate there are going to be days where we do some good gains like today and then there are days where we do see a correction like what we saw last week." Global miners took a breather after recent gains fuelled by strong commodities prices. Rio Tinto Ltd slipped 0.4 percent and rival BHP Billiton Ltd lost 0.8 percent. Copper prices were steady after dipping on Wednesday, but consumers were reluctant to chase prices that hit two-week highs earlier in the week, given global oversupply. Supermarket giant Woolworths Ltd jumped 1.4 percent after the chain store reported a 3.8 percent rise in third-quarter same-store food and liquor sales on Thursday. Gold miners were weaker after bullion fell 1.5 percent on Wednesday, its biggest one-day drop in 1-1/2 months, hit by signs that the U.S. Federal Reserve is inching closer to ending its monetary stimulus program and by Cyprus's plan to sell its gold reserves to raise cash. Gold bounced on Thursday, but gains were capped. Heavyweight gold miners Newcrest Mining Ltd lost 1 percent while Resolute Mining Ltd plumbed 8 percent. New Zealand's benchmark NZX 50 index finished the session 0.2 percent, or 10.5 points lower at 4,409.5. (Reporting by Thuy Ong; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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