Reuters: Hot Stocks: Australia shares edge up, yield play still in place

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Australia shares edge up, yield play still in place May 28th 2013, 02:11 Tweet Share this Email Print Mon May 27, 2013 10:11pm EDT (Adds details, comments, stocks on the move) SYDNEY, May 28 (Reuters) - Australian shares edged 0.3 percent higher in volatile trade on Tuesday as strength in the finance sector offset poor sentiment from investors who were unnerved by a slump in the Japanese market and uncertainty over U.S. stimulus measures. With few offshore leads due to public holidays in the U.S. and Britain, Australian investors continued to favour the yield play despite the recent sell-off, said Andrew Quin, research strategy coordinator at Patersons Securities in Perth. "With foreign investors selling out because of Australian dollar risk, it's creating an opportunity for Australian investors to pick up good and top-level yielding companies again," Quin said. Banks bounced back from earlier losses, Westpac Banking Corp rallied 1.3 percent while top lender the Commonwealth Bank of Australia added 0.9 percent. The big four banks offer on average some 5.6 percent in dividend yield, compared to 3 percent to 4 percent interest on 12-month term deposit accounts. Telstra Ltd climbed 1 percent. The top telecommunications provider currently yields 5.7 percent. The benchmark S&P/ASX 200 index added 12.8 points to 4,972.7 by 0156 GMT. It fell 0.5 percent on Monday. "The market has lost 289 points or 5.47 percent in seven days," said Evan Lucas, market strategist at IG in a note. "Three times the market has touched this level [of 4,900] and has subsequently rallied every time." The market has been hit in recent sessions by turbulence in Japanese equities as well as last week's suggestion by U.S. Federal Reserve chief Ben Bernanke that the massive bond-buying programme could be rolled back this year. Defensives were moderately weaker, with consumer retail staples Woolworths Ltd dropping 1.5 percent and Wesfarmers Ltd falling 0.6 percent. Gas utility provider Origin Energy Ltd plumbed 1.2 percent. Slowing growth in China, Australia's major export market, has also raised concerns about a downturn in iron ore prices. Iron ore miners were mixed, BHP Billiton Ltd edged 0.1 percent higher while rival Rio Tinto Ltd slipped 0.2 percent. New Zealand's benchmark NZX 50 index was trading mostly flat, or up 2.6 points to 4,480.8. U.S. and British markets were closed for public holidays. STOCKS ON THE MOVE * Shares in Australand Property Group dropped 6 percent lower to 3-month lows of A$3.32, after GPT Group scrapped a plan to buy Australand's $2.4 billion investment property portfolio and its commercial and industrial business. (0155 GMT) * Pharmaxis Ltd dived 5.7 percent to A$0.22 after the company said on Tuesday it would cut 48 jobs or 30 percent of its workforce after regulatory and clinical trial setbacks. (0155 GMT) NZ STOCKS ON THE MOVE * New Zealand insurance company Tower Ltd rose as much as 10 percent to a six week high after it reported an 87 percent rise in first half profit on gains from the sale of businesses as it focuses on general insurance. It said it would give sale proceeds back to shareholders and revamp its dividend payouts. It last traded up 15 cents or 8.8 percent to NZ$1.85. (2348 GMT) (Reporting By Maggie Lu Yueyang and Thuy Ong; Editing by) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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