Australian shares rose 0.3 percent on Monday to a fresh four-month high, lifted by the materials sector as a recent recovery in commodities prices and a flurry of central bank stimulus fuelled hopes for stronger global growth and demand. The benchmark S&P/ASX 200 index rose 12.5 points to 4,402.5, its highest close since May 3. The benchmark rose 1.2 percent to a four-month closing high on Friday. New Zealand's benchmark NZX 50 index ended up 0.7 percent at 3,817.2.
Top miner BHP Billiton jumped 2.5 percent to A$34.15 while rival Rio Tinto rose 1.6 percent to A$57.50. "Materials are so strong they are dragging the market up, stimulus is always good for the riskier assets," said Macquarie Equities division director Lucinda Chan.
Analysts saw long-term benefits for commodities markets and local miners, saying the materials sector has broken out of a downtrend on the back of aggressive stimulus plans from the US Federal Reserve last week. But technical analysts said the local market was facing tough resistance at around the 4,400 level, with a late rally to 4,412.2 trimmed back in closing trade.
Construction firm Leighton Holdings shares surged 8.4 percent to A$17.05 after it said the first large-scale production of drinking water has started during a testing phase at its much-delayed Victorian desalination plant. The engineering sector was weighed down by a trading halt for contractor and Leighton affiliate, MacMahon Holdings, ahead of a profit warning. Monadelphous lost 1 percent.
Shares in junior copper explorer Pegasus Metals Ltd vaulted 96 percent to A$0.235 after it reported a high-grade sulphides find its Mt Mulcahy project. Casino operator Echo Entertainment Ltd shares ended flat. The firm said revenue for the first 10 weeks of the new fiscal year was up 11.1 percent over the same time a year ago, helped by a 26.7 percent improvement at its refurbished Sydney Star casino.
Investors are awaiting any news from Fortescue Metals Group, on a trading halt, which is in talks with lenders to restructure its debt. Fortescue slammed the brakes on $9 billion of expansion, slashed jobs and sold a power station to shore up funding due to weak iron ore prices.
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