Reuters: Hot Stocks: Australian shares edge higher on Wall St & low $AUD, HY stocks cap gains

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Australian shares edge higher on Wall St & low $AUD, HY stocks cap gains May 29th 2013, 06:26 Wed May 29, 2013 2:26am EDT (Adds details, comments) SYDNEY May 29 (Reuters) - Australian shares edged 0.1 percent higher on Wednesday led by miners as the Australian dollar fell to 19-month lows and a boost in investor sentiment from Wall Street lifted the market, but gains were capped by a sell-off in high-yielding stocks. The Australian dollar slumped to its weakest in 19 months on Wednesday after robust U.S. economic data reinforced expectations the Federal Reserve may start unwinding its stimulus programme soon. Global iron ore miners BHP Billiton Ltd jumped 2.6 percent while rival Rio Tinto Ltd soared 3.4 percent. The world's biggest coking coal exporter, BHP Billiton said it expects the market to be "comfortably supplied" in the near term, with supply swings determined by U.S. mines and demand swings dominated by China. "We're seeing a pick up in the mining stocks which of course is boosted by the weaker Aussie dollar," said Juliette Saly, stock market analyst at Commonwealth Securities. The S&P/ASX 200 index added 4.1 points to finish at 4,974.7. Companies with a large exposure in the U.S. market also benefit from a weaker Australian dollar when funds are repatriated. Pallets supplier Brambles Ltd climbed 3 percent while manufacturer James Hardie Industries rallied 1.5 percent. QBE Insurance Ltd surged 4.7 percent. "We've got to take into account the strong offshore lead but certainly a lot of other areas that are impacted by the weaker Australian dollar are doing quite well, there certainly is support coming through," Saly noted. The market lost 3.8 percent last week grappling with slowing growth in China, suggestions the U.S. may roll back its stimulus this year, and turbulence in Japanese equities. However, the benchmark rose 0.2 percent on Tuesday, snapping a five-day losing streak and managing to claw back modest gains. High-yielding financials finished the session weaker. National Australia Bank fell 1.8 percent and top lender Commonwealth Bank of Australia plumbed 2.5 percent. Australia and New Zealand Banking Group dropped 1.7 percent, although it had announced a $425 million on-market buyback of its ordinary shares. The big four banks have average dividend yields of some 5.6 percent, compared to 3 percent to 4 percent interest yields for 12-month term deposit accounts. "The spectacular rises we've seen in the past six months mean a lot of holders have substantial capital gains, and some appear to be moving to lock those in," said Michael McCarthy, chief market strategist at CMC Markets. Defensives with high yields also fell, flagship telecommunications company Telstra Ltd slipped 0.2 percent while supermarket giant Wesfarmers Ltd lost 2.6 percent. U.S. stocks rose on Tuesday, with the Dow closing at yet another record high after central banks reassured investors that they will retain policies designed to foster global growth. New Zealand's benchmark NZX 50 index added 0.2 percent or 10 points to finish at 4,488.3. (Reporting by Thuy Ong, additional reporting by Michael Sin; Editing by Eric Meijer) Link this Share this Digg this Email Reprints

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