Reuters: Hot Stocks: Australia shares edge higher on strong financials, firmer US dollar

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Australia shares edge higher on strong financials, firmer US dollar Jun 25th 2013, 01:35 Mon Jun 24, 2013 9:35pm EDT (Adds analysis, quotes, stocks on the move) SYDNEY, June 25 (Reuters) - Australian shares edged 0.3 percent higher on Tuesday as a strong financial sector and weaker Australian dollar buoyed exporters, helping to offset concerns that a cash crunch could slow Chinese growth. The S&P/ASX 200 index rose 12.1 points to 4,681.2 by 0122 GMT. The benchmark dropped 1.5 percent on Monday. Big banks helped lift the market, with top lender the Commonwealth Bank of Australia adding 0.8 percent and Westpac Banking Corp climbing 0.9 percent. "The markets have been sold so heavily, it's not surprising to see it hold up," said Tim Radford, global analyst at Rivkin Securities. "This is a good opportunity to grab some high-yield out there." The big four banks currently have dividend yields on average of some 5.9 percent, compared to 3 percent to 4 percent yields for standard 12-month depositor accounts. Meanwhile, companies benefiting most from the sliding Aussie dollar include biotechnology firm CSL Ltd, which jumped 1.4 percent, while QBE Insurance Ltd climbed 1.3 percent. After a wild ride, the Australian dollar was trading at $0.9246, having touched a 33-month low of $0.9148 overnight. Stocks have been hit hard in recent sessions by concerns about the U.S. Federal Reserve's plan to cut back on how much cheap money it pumps into the world's largest econmomy, causing sharp adjustments in global asset markets. Flagship miners BHP Billiton Ltd and Rio Tinto Ltd lost 0.9 percent and 1.2 percent, respectively, due to fears that tighter liquidity and slower growth in China could reduce its demand for iron ore. "The actions from the Chinese government to reduce liquidity in China will have on-flowing effects to other firms as well," said Tim Radford, global analyst at Rivkin. "It's a rippling effect and that's obviously impacted risk appetite in the Aussie market out of fears something could go wrong in China." The People's Bank of China said banks needed to do a better job of managing their cash and lending, as the central bank attempts to move the world's second largest economy away from credit-driven investment. New Zealand's benchmark NZX 50 index slipped 0.3 percent or 13.3 points to 4,350.8. STOCKS ON THE MOVE * Perseus Mining Ltd slumped 19.6 percent to near four-year-lows of A$0.535 after the company said production for the second half of FY 13 is likely to be marginally below the lower end of the guidance range of 105,000 to 125,000 ounces. (0124 GMT) * Australian Infrastructure Fund Ltd dived 97.1 percent to A$0.005 after undergoing changes in substantial holdings from Wilson Asset Management Group. The stock opened at A$0.006. (0126 GMT) (Reporting by Thuy Ong, Editing by Kim Coghill) Link this Share this Digg this Email Reprints

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