Reuters: Hot Stocks: Australian shares pare early gains, investors cautious ahead of RBA meeting

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Australian shares pare early gains, investors cautious ahead of RBA meeting May 6th 2013, 07:09 Mon May 6, 2013 3:09am EDT (Adds details, comments) SYDNEY May 6 (Reuters) - Australian shares rose 0.5 percent on Monday, buoyed by Wall Street's record highs after a surprisingly robust U.S. jobs report, but weak Chinese data and caution ahead of the central bank's board meeting capped gains. Global miners BHP Billiton Ltd jumped 2.8 percent while rival Rio Tinto Ltd soared 3.1 percent as Shanghai copper futures jumped by their 5 percent daily limit on Monday. Mirabela Nickel climbed 50 percent to A$0.165 reversing a near-uninterrupted decline since early February. The Reserve Bank of Australia is due to meet on Tuesday and a Reuters poll of 21 economists last week found only four were tipping an easing. However, markets think it will be a closer call, and are pricing in a 50-50 chance of an easing to 2.75 percent. "On any metric we've been seriously oversold in the last few weeks and we think this is just a reversal of that unrealistic valuation," said Mirabela Nickel's Chief Financial Officer Chris Els. Financials finished the session weaker. Westpac Banking Corp lost 1.1 percent while National Australia Bank fell 0.7 percent. Top lender Commonwealth Bank of Australia bucked the trend, adding 0.9 percent. Growth in China's services sector slowed sharply in April to its lowest point since August 2011, a private sector survey showed on Monday - fresh evidence of rising risks to a revival in Australia's biggest export market. The S&P/ASX 200 index added 26.7 points to finish at 5,156.2 after reaching an intraday high of 5,201.3. The market last traded above 5,200 points in July 2008. The index fell 0.6 percent last week and finished flat on Friday. The benchmark, while trading stronger than the rest of the region early in the session, pared gains but still finished up. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7 percent. A total of 541.3 million shares traded hands in a subdued session. "I think there is still some caution. We have the RBA decision tomorrow, which is going to be very important for the yield play on the market," said Peter Esho, investment adviser from Wilson HTM Investment Group. "We're seeing a bit of paralysis out there in terms of market direction. I think that's why we've given up some of those gains from this morning." Shares in Australia's Lynas Corp Ltd, which has a rare earth plant in Malaysia, climbed 16 percent to A$0.58 after the National Front coalition won re-election, fending off an opposition challenge that had unnerved investors. Karoon Gas Australia Ltd surged 22.6 percent to A$4.89 after the company made a second oil discovery in its three well Santos Basin exploration drilling campaign. Leighton Holdings Ltd jumped 2.2 percent to A$19.43 after the company reported a first quarter profit of $123 million. Australian retail turnover for March fell 0.4 percent contrary to forecasts by a Reuters poll that centred on a rise of 0.2 percent on the month. Retail turnover was up 2.2 percent for the quarter. Australian job advertisements in newspapers and on the Internet fell for a second straight month in April in a sign firms are still cautious on hiring despite evidence of a revival in consumer demand. The Dow and S&P 500 advanced to all-time closing highs on Friday, with major indexes jumping 1 percent after the unexpectedly strong April jobs report eased fears of an economic slowdown. New Zealand's benchmark NZX 50 index climbed 1.1 percent or 51.9 points to 4,596.2. (Reporting by Thuy Ong and James Regan; Editing by Jacqueline Wong) Link this Share this Digg this Email Reprints

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