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Australian, NZ shares rise in thin trade on China optimism

Published 06/03/2019, 11:57 am
Updated 06/03/2019, 12:00 pm
© Reuters.  Australian, NZ shares rise in thin trade on China optimism
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* Miners lead gains on China stimulus prospects

* New Zealand touches record high during session

By Ambar Warrick

March 6 (Reuters) - Australian shares rose on Wednesday, as mining stocks climbed on the prospect of increased Chinese stimulus although investors remained cautious with trading volumes thin as the benchmark approached a decade high.

The S&P/ASX 200 index .AXJO rose 0.4 percent, or 22.5 points, to 6,221.8 by 0033 GMT. The benchmark fell 0.3 percent on Tuesday. Trading volumes were at a fifth of the 30-day average.

"We're not seeing a huge amount of commitment to trading this morning, and that reflects the fact that the market has run very hard over the last couple of months," said Michael McCarthy, Chief market strategist at CMC Markets.

"There are some concerns that as it nears that 10-year high around 6,375, that we could see some corrective action. Some reluctance from investors to jump in."

Australia's fourth-quarter gross domestic product also came in slightly weaker than expected. Market participants have tempered their expectations for Australia's economy as tepid wages and a cooling property market undermine growth.

The Australian metals and mining index .AXMM rose about 0.7 percent after China announced an increase in domestic spending, which is seen as positive for Australian resource exporters. prospect of higher demand was also reflected in stronger commodity prices. Mining majors BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX rose about 0.6 percent each. Both firms export large volumes of iron ore and copper to China.

Gold stocks also lent some support, with the Australian gold index .AXGD rising more than 1 percent.

Meanwhile, infant formula maker Bellamy's Australia BAL.AX led gains on the ASX 200 after its smaller rival Bubs Australia BUB.AX announced plans for Chinese expansion. Bubs' potential success could bode well for other China-reliant consumer stocks, which struggle with fickle regulators in the country. largest department store operator Myer Holdings Ltd MYR.AX surged about 13 percent after swinging to a first-half profit. Zealand shares were a touch higher amid thin trade. The benchmark S&P/NZX 50 index .NZ50 rose 0.2 percent or 15.71 points to 9,409.66.

Electricity retailer Meridian Energy MEL.NZ rose about 0.5 percent, while Auckland International Airport AIA.NZ gained 0.7 percent.

The New Zealand benchmark had touched a record high earlier in the session. However, its recent gains may stoke fears of an eventual correction, owing to investors wanting to lock in their profits.

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