Australian shares bounced on Thursday following three sessions of declines, though gains were capped by expectations some major banks may seek to raise their capital further. The S&P/ASX 200 index rose 0.6 percent to 5,230 at the close of trade, pulling away from a one-week trough of 5,164.2 plumbed on Wednesday. New Zealand's benchmark NZX 50 index rallied 0.8 percent or 48.58 points to finish the session at 5,775.7, its highest in two months.
Encouraged by an overnight jump in bullion prices, gold miner Newcrest Mining rose 4.3 percent, leading the mining sector higher. Rio Tinto put on 1.9 percent and BHP Billiton added 1.4 percent. The major banks were subdued. Westpac Banking Corp remained on a trading halt a day after the No 2 mortgage lender said it will raise A$3.5 billion ($2.57 billion) to meet new, stricter capital rules.
Speculation that ANZ will follow suit saw its shares fall more than 1 percent. National Australia Bank eased 0.4 percent. A surprise decision on Wednesday by Westpac to push up home loan rates, which amounted to a general tightening of monetary conditions, fuelled talk that the Reserve Bank of Australia will have to cut its cash rate as early as November 3.
Investors barely reacted to a soft set of employment numbers released earlier. "The September jobs data do nothing to change my view that the RBA will need to ease official interest rates again to head off higher owner occupier mortgage rates as the major banks seek to follow Westpac's lead in seeking to recoup higher funding costs flowing from higher capital requirements," said Shane Oliver, head of investment strategy at AMP Capital.
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