Australian shares up

Australian shares closed firmer on Monday, tracking Wall Street's positive lead, with banks and industrial metals miners spearheading gains. The S&P/ASX 200 index climbed 0.7 percent, or 40.39 points, to 5,537.8, not far off its highest since August 2015. New Zealand's benchmark S&P/NZX 50 index gained 0.5 percent or 39.88 points to finish the session at 7,348.3.
Australian benchmark fell 1.2 percent last week, after three consecutive weeks of gains. The index is up nearly 4 percent this year. Financial shares bounced following last week's losses when the Reserve Bank of Australia cut its cash rate. "The big story today really is the banks, nearly two-thirds of the increase in the index today is due to the financials," said James McGlew, executive director of corporate stockbroking at Perth broker Argonaut.
"Quite clearly there's an expectation following last week's rate drop that their margins aren't going to be squeezed as tightly as markets were originally thinking," he said, adding that bank dividends remain high relative to deposit rates. Macquarie Group leapt 2.6 percent to its highest in six weeks and looked set to test a January peak. Australia and New Zealand Banking Group added nearly 2 percent, while National Australia Bank Ltd, Commonwealth Bank of Australia and Westpac Banking Corp each gained more than 1 percent.
Miners were also in demand following a jump in iron ore prices. Global miner BHP Billiton added around 2 percent. Rio Tinto rose 1.4 percent and Fortescue Metals 1.7 percent. Infrastructure services provider Downer EDI, which surged 6 percent on Friday, was up another 6.5 percent.
Rising oil prices underpinned energy shares. Whitehaven Coal leapt 4.5 percent, WorleyParsons gained 3 percent, while Woodside and Oil Search rallied around 2 percent each. Investors steered from the telecommunications sector. Telstra was down 0.5 percent. New Zealand's outdoor equipment retailer Kathmandu rose 3.7 percent, while Sky TV was up 2.8 percent.
The subsidiaries of Australian banks were among the biggest gainers, with Westpac and ANZ each rising 2.6 percent. Casino operator Sky City, due to report full-year results on Wednesday, rose 1.3 percent. Property companies struggled with Precinct Property down 0.4 percent and Kiwi Property off 0.3 percent. Steel goods manufacturer Steel Tube led losses, falling 1.4 percent.