CANBERRA: Australian shares bounced off a two-year trough on Tuesday as the banking sector led a stunning recovery, a day after the market suffered its biggest one-day drop in over six years.
The S&P/ASX 200 index climbed 2.2 percent, or 111.6 points, to 5,112.9 by 0220 GMT, having turned around from a session low of 4,928.3 – a level not seen since July 2013. It skidded 4.1 percent on Monday as fears about slower Chinese growth sent stock markets across the globe into a tailspin.
“A few people are saying Australia is leading the way in Asia as calmer heads are prevailing here. But it’s hard to know the actual mix between genuine buying and short-covering after what has been a very aggressive and ferocious move lower,” said Chris Weston, chief market strategist at IG. “Whether or not we can sustain the rally as we go into the back end of the day is yet to be seen.”
Traders said gains in U.S. stock index futures were also helping offset a still weak Chinese market. The CSI300 index was down 4.3 percent in morning trade.
The banks were in the lead with the “Big Four” lenders rallying from two-year lows. Westpac Banking Group jumped 4.3 percent to A$30.70, having earlier fallen as far as A$29.20. Commonwealth Bank gained 3.4 percent.
The major miners were also firmer with Rio Tinto 2.4 percent higher on the day. For more individual stocks activity click on
New Zealand stocks remained in the red but were well off the session low. The benchmark NZ50 index was last at 5,587.8, down 0.3 percent on the day. Earlier, the index fell more than 2 percent to 5,461.73, its lowest since December.
Losses were led by utilities, with Meridian Energy falling 3.3 percent to a two-month low, while utilities investors Infratil fell 3.5 percent to its weakest since mid-May.
Genesis fell 0.6 percent, but losses were limited as the partially-privatised power company found some support after reporting more than doubling its annual profit.
Concerns about a slowing Chinese economy weighed on export-related companies, with transport company Mainfreight falling 2.2 percent to a 13-month trough of NZ$14.10, while construction materials maker Fletcher Building fell around 1.5 percent to NZ$6.99, its weakest since late 2012.
Auckland Airport fell 2.4 percent and Air New Zealand stumbled 4.9 percent, stung by concerns that global market turmoil may lead to a fall in tourists in the coming months, slashing incomes in one of the country’s key industries.
Wynyard Group fell 2.3 percent to NZ$1.28 after the anti-crime software developer said that its annual loss widened in the past year.
