Australian shares rose 0.3 percent on Monday, led by the banking sector on hopes for further stimulus in the United States and measures to lift growth in China, Australia's top trade partner. Top lender National Australia Bank led the sector with a 0.5 percent rise.
Australian banks, which borrow close to $100 billion a year to bridge a gap between deposits and loans, would benefit from any lowering in the cost of funds from fresh global stimulus measures. Miners were under pressure early but mostly recovered. Rio Tinto climbed 1.2 percent and Fortescue Metals Group rose 0.6 percent. BHP Billiton dropped 1.2 percent as it traded without its dividend. The benchmark S&P/ASX 200 index gained 13.6 points to 4,329.7. It finished flat on Friday. New Zealand's benchmark NZX 50 index rose 0.06 percent to 3,669 points.
The Australian market appeared to staging a minor correction since it hit 4,402 points on August 21, and a break below support at around 4,285 could see it head towards the 200-day moving average at around 4,215, said Ric Spooner, chief market analyst at CMC Markets. "On the upside, there is established resistance in the index at around 4,475," Spooner said. "A move above that level is likely to imply new levels of investor confidence."
Retailers were the main drag after Australian retail sales fell 0.8 percent in July, the largest fall since October 2010 and well short of forecasts of a 0.2 percent increase. Myer, David Jones, and JB Hi-Fi fell 3.8 percent, 1.2 percent and 1.9 percent respectively after data showed department store sales slumped 10.2 percent in August.
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