Australian shares rose to a 20-week high on Thursday as hopes for an interest rate cut within days pushed up indexes even as oil prices at multi-year lows sent energy stocks sharply lower The S&P/ASX 200 index rose 0.3 percent or 16.7 points to close at 5569.5, its highest since September 10 and its sixth consecutive day of gains. New Zealand's benchmark NZX 50 index touched a record intraday high before retreating to finish down 35.0 points or 0.6 percent at 5759.8.
After oil prices plumbed six-year lows overnight, large energy companies warned of spending and earnings cuts, sending the stocks lower. But banks, retailers and other stocks said to benefit from lower interest rates gained as the oil price slide, coupled with lacklustre domestic economic data in recent days, added to expectations that the Reserve bank of Australia will cut rates at a February 3 meeting. "The energy sector is getting smashed, as expected," said Evan Lucas, market strategist at trader IG Markets. However, he added that "we are alive and kicking for a rate cut next Tuesday", citing figures which showed December quarter exports were flat despite higher prices.
Among energy producers, Woodside Petroleum fell 2.21 percent and Santos dropped 4.3 percent. Oil Search dipped 2.8 percent after announcing plans to cut spending and warning of an impairment charge of up to $200 million for 2014. Beach Energy fell 4 percent after saying it will cut spending by 20 percent because of the oil price slide. Non-oil resources fared better. Iron ore producer Fortescue Metals Group gained 5 percent after saying cost-cutting had allowed it to continue operating profitably. BHP Billiton and Rio Tinto each fell half a percentage point.