Reuters: Hot Stocks: Australian shares rise on financials and yield play

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Australian shares rise on financials and yield play Apr 29th 2013, 01:39 Sun Apr 28, 2013 9:39pm EDT (Adds details, comments, stocks on the move) SYDNEY, April 29 (Reuters) - Australian shares rose 0.6 percent on Monday led by the financial sector as investors sought high yield, but gains were capped by weakness in metals prices and disappointing U.S. first-quarter growth figures. National Australia Bank jumped 1.3 percent, while Westpac Banking Corp climbed 1.2 percent. "It's likely to do with the yield play, investors are using the pause in the market to help accumulate positions in the high-yielding banks particularly," said Tim Radford, global analyst at stockbroker Rivkin. "I can definitely see this continue next week, especially if the ECB (European Central Bank) do cut rates on Thursday night, we could see an escalation on Friday in the Australian market as institutions look to find high yield." Dividend yield on average for the four big banks is some 5.1 percent, compared to between 3 percent to 4 percent yields for 12-month maturity depositor accounts. Meanwhile, weak metals prices hurt mining stocks, with global miners BHP Billiton Ltd losing 0.5 percent and Rio Tinto Ltd dropping 0.9 percent. BHP Billiton has agreed to sell its Pinto Valley copper mine and a railroad in Arizona to Capstone Mining Corp for $650 million, the latest in a spate of asset sales by the top global miner as it tightens its belt in a weaker market. Copper fell more than 2 percent on Friday and iron ore prices drifted to five-week lows as some investors closed their positions ahead of the Golden Week holiday in China that has thinned demand already hurt by a shaky steel market. The S&P/ASX 200 index climbed 29 points to 5,126.5 by 0126 GMT. Despite the modest loss of 0.1 percent on Friday, the market posted its biggest weekly gain since December 2011 of 3.4 percent. Last week's advance was underpinned by buying in previously beaten down sectors and demand for financial stocks for their attractive dividend yields. Defensives were stronger. Consumer staples Woolworths Ltd and Wesfarmers Ltd rose 0.1 percent and 1 percent. Top telco Telstra Ltd added 0.4 percent. Insurers were also trading firmer. QBE Insurance Group Ltd soared 2 percent while Insurance Australia Group Ltd jumped 1.9 percent. On Friday, U.S. data showed gross domestic product expanded at a 2.5 percent rate in the first quarter, below estimates of 3 percent, heightening fears the economy could struggle to cope with deep government spending cuts and higher taxes that kicked in earlier this year. New Zealand's benchmark NZX 50 index rose 0.6 percent or 26.2 points to 4,575, a record high. STOCKS ON THE MOVE * Aquila Resources plunged 10.6 percent to A$1.815 on Monday after the company suffered a setback to its plans to raise capital via asset sales to help fund a A$7.4 billion ($7.6 billion) Australian iron ore project after Sumitomo Corp pulled out of a coal exploration partnership. (0124 GMT) * Tabcorp Holdings Ltd rallied 1.5 percent to A$3.39 after the company reported revenue from continuing operations in Q3 was A$480.3 million, up 2.6 percent on the prior corresponding period. (0124 GMT) * Coal of Africa Ltd was trading flat at A$0.17 after the company posted its quarterly cashflow report. (0124 GMT) (Reporting by Thuy Ong; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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