SYDNEY: Australian shares edged higher on Friday as a base metals rally pushed up resources stocks, while investors bought bank stocks made cheap by months of selling as a result of regulatory changes. Overnight, copper led base metals prices higher amid expectations that China may announce more infrastructure projects, providing a boost to Australian mining stocks.
Investors meanwhile bought bank stocks, which have been hammered in 2015 following capital rules requiring them to undertake some A$20 billion ($14 billion) in capital raisings and to sell nonessential business units. That has improved the stocks’ dividend yields. By 0131 GMT, the S&P/ASX 200 index was up 12.4 points or 0.2 percent at 5,223.1. The benchmark has risen in seven of the last 10 sessions.
“The key thing for the index is investor perception of the banks,” said Angus Nicholson, an analyst at IG Markets. “It doesn’t look like the dark days are over for them yet, but there does look like a bit more buying.”
National Australia Bank was up 0.6 percent, while Westpac Banking Corp rose 0.4 percent, Commonwealth Bank of Australia added 0.3 percent and Australia and New Zealand Banking Group was flat.
Mining giant BHP Billiton was 1.4 percent higher. The stock is trading at multi-year lows as it manages the fall-out from a dam bursting at a Brazilian mine it part-owns, a low iron ore price and speculation it may stop growing dividends. Its rival Rio Tinto rose 0.5 percent and BHP spin-off South32 jumped nearly 3 percent.
Energy stocks rose, even as the oil price slipped. Woodside Petroleum gained 2.6 percent while Santos firmed 1.5 percent. Law firm Slater and Gordon slumped 25 percent, the biggest decliner on the benchmark index, following an even bigger drop the previous day, as proposed changes to U.K. law will make it harder to mount compensation claims.
New Zealand’s benchmark NZX 50 index rose 0.1 percent or 4 points to 6,091.77. Trading was light given tepid offshore trading due to the U.S. Thanksgiving holiday. The biggest gainers were Tower, which added 2.1 percent and Genesis Energy, also up 2.1 percent. Fisher & Paykel Healthcare shed 0.5 percent after it reported a record half year net profit, up 27 percent and reiterated its full year guidance.
