Reuters: Hot Stocks: Australian shares rally, banks soar; CPI data raise hopes of more rate cuts

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Australian shares rally, banks soar; CPI data raise hopes of more rate cuts Apr 24th 2013, 02:26 Tue Apr 23, 2013 10:26pm EDT (Adds details, comments, stocks on the move) SYDNEY/WELLINGTON, April 24 (Reuters) - Australian shares jumped 1.3 percent in midday trade on Wednesday, as banking stocks soared and as benign inflation data strengthened the case for more interest rate cuts. Financials were led higher by Westpac Banking Corp climbing 2.1 percent to A$32.36 and top lender the Commonwealth Bank of Australia advancing 2 percent to A$71.45. Both stocks were at an all-time high. "It's basically all about the yield play in the market at the moment, I think everyone's chasing those big banks for high yields," said Stan Shamu, market strategist at IG Markets. Investors are also starting to price in expectation for potential further rate cuts, with the banking sector looking more attractive, he said. Data on Wednesday showed that Australia's first-quarter core consumer price index (CPI) rose 0.3 percent on-quarter, below a 0.5 percent rise forecast in a Reuters poll, narrowing the odds of further interest rate cuts from the Reserve Bank of Australia (RBA). "It's a fairly benign reading," said Shamu. "With such a reading coming out there's definitely talk of room for further rate cuts, and whether or not the RBA will pull the trigger it certainly seems that inflation is well under control." The S&P/ASX 200 index was up 65 points at 5,081.2 by 0158 GMT. The benchmark rose 1 percent on Tuesday. Global miners BHP Billiton and Rio Tinto rose 1.4 percent and 1.9 percent respectively, partly recovering from losses a day earlier. Defensives were mostly stronger, food retailer Woolworths Ltd climbed 1.6 percent while gas utility provider Origin Energy Ltd inched up 0.4 percent. Wall Street climbed on Tuesday in a broad rally, recovering from sharp declines sparked by a "bogus" Associated Press tweet about explosions at the White House. New Zealand's benchmark NZX 50 index added 0.4 percent or 20.3 points to 4,536.8. Air New Zealand Ltd, was up 5.6 percent to NZ$1.52, a near one-month high, after it forecast full year normalised earnings before tax of between NZ$235 million to NZ$260 million on higher passenger numbers. In February it said only that it expected to "comfortably exceed" 2011/12's NZ$91 million. STOCKS ON THE MOVE * Billabong International Ltd dropped 2.1 percent to an all-time low of A$0.47 after the battered surf-wear company extended its exclusivity period for the Sycamore deal to May 8. (0200 GMT) * Brambles Ltd jumped 1.8 percent to A$8.805 after the pooling solutions company reaffirmed its full year underlying profit outlook. (0201 GMT) (Reporting by Thuy Ong and Gyles Beckford; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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