Australian shares rose 1.0 percent on Tuesday, supported by broad-based buying in miners and banks as investors grew more hopeful that US lawmakers might be nearing a budget and debt deal after weeks of wrangling. The S&P/ASX 200 index climbed up 51.2 points to 5259.1, the highest close since September 30. The benchmark fell 0.4 percent on Monday.
Rio Tinto extended gains to end 2.5 percent higher after the global miner boosted its forecast copper output for 2013 and posted record iron ore and coal output in the third quarter. Meanwhile, minutes of the Reserve Bank of Australia's October 1 meeting revealed that the bank is prepared to cut interest rates further though it signalled no urgency to act because there was a substantial amount of policy stimulus already in place.
New Zealand's benchmark NZX 50 index inched up 0.3 percent to 4,747.9. Australian shares jumped 1.1 percent on Tuesday morning on hopes that US lawmakers might be nearing a budget and debt deal after weeks of wrangling, with miners and banks rallying and underpinning broad-based gains. US senators said they were closing in on a deal on Monday that would reopen the government and push back a possible default for several months, though many hurdles remained as a Thursday deadline drew near.
"While negotiations are yet to see any substantial agreement or deal, the current theme boosting US equity markets is the sudden willingness of Democrats and Republicans to now find a solution," Rivkin global analyst Tim Radford said in a note to clients. The Australian market has faltered since the US government shutdown on October 1, dipping to one-month lows before recovering slightly to the 5,200-level as investors keep a wary eye on the developments in Washington. Resources stocks led the gains on Tuesday, with miners BHP Billiton Ltd and Rio Tinto jumping 1.4 percent and 1.7 percent, receptively.
Rio Tinto is due to report its third-quarter production at 0400 GMT, with analysts expecting a 3 percent rise in iron ore output from the previous quarter to 53 million tonnes. Among banks, top lender Commonwealth Bank of Australia climbed 0.9 percent and Westpac Banking Corp rose 1 percent. Investors were also monitoring annual general meetings for guidance, said Simon Twiss, a dealer at Arnhem Investment Management.
Bionic ear maker Cochlear Ltd lost 1.8 percent after it said at its annual general meeting that it expected net profit after tax for the fiscal year 2014 to be at the prior year's level. The company reported a 16 percent fall in its 2013 profit. "From the numbers I have seen, the market is looking for a 6 percent increase. It's not a huge, but again, any sort of disappointment doesn't get them well," Twiss said.
Top telecom company Telstra Corp Ltd rose 1.3 percent after saying it was forecasting low single-digit earnings growth at its annual meeting. Casino operator Crown Ltd jumped 2.8 percent after local media reported that the Queensland state government said it would grant up to three additional casino licences to boost tourism, which could benefit Crown. Smaller rival Echo Entertainment Group Ltd, which currently holds the casino licence in Queensland, tumbled 5.2 percent. Linc Energy Ltd jumped 8.7 percent after the company said that oil valuations for its oil fields in the United States now total $4.5 billion, with its Wyoming EOR project revalued to over $1.1 billion.