Australian shares ended higher on Wednesday, with investors favouring mining stocks over their banking counterparts as a deepening US debt yield curve inversion raised concerns over margin pressure for lenders.
The S&P/ASX 200 index finished 0.5%, or 29.4 points, higher at 6,500.6.
Australia's equity markets are dominated by banking and resource stocks, and with the former losing favour with cautious investors, miners and energy units tacked on 1.8% and 0.9%, respectively.
The world's biggest miner BHP Group closed 1.3% higher, while oil and gas producer Woodside Petroleum gained 1.6%.
"With the yields collapsing, we have to think the margins for the banks are getting tougher and tougher," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.
The US Treasury yield curve inversion deepened on Tuesday to levels not seen since 2007, pointing to pressure for the net interest margins for banks, as they pay short-term rates on deposits and take in long-term rates on loans.
The "big four" banks lost between 0.3% and 1.3%, while troubled wealth manager AMP Ltd closed 0.9% lower after touching a record low, as Ratings agency S&P Global on Tuesday downgraded its credit rating. Lingering fears about trade and the global economy fed safe-haven appetite, boosting gold stocks to close 2.5% higher. Gold miner Newcrest Mining Ltd added 2.9% for the session. Technology stocks such as Appen Ltd and Afterpay Touch surged 10.8% and 9.3%, respectively, to lead gainers on the benchmark. Afterpay closed at its best level in well over 3 months after posting solid annual growth in the United States and Britain.
Elsewhere, Australia's No. 2 airline Virgin Australia closed at its weakest since 2009 after swinging to an annual underlying loss, and posting plans to cut 750 jobs, merge business divisions and conduct a sweeping review of its operations.
New Zealand's benchmark index ended 1.1% higher, or 113.01 points, at 10,626.17. Fisher and Paykel Healthcare Corp was the top gainer, up 6.1% after upgrading its full-year earnings guidance.
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