Australia Shares Push Higher, Driven by Banks

   By Robb M. Stewart 
 

MELBOURNE, Australia--Australian equities rallied in early trading Wednesday, reversing losses in the previous three sessions as financial stocks resumed their push higher and earnings results from retailer David Jones helped lift the consumer sector.

Several traders had anticipated the local market would take its lead from weaker U.S. markets overnight as uncertainties persist over the recovery in the world's biggest economy.

"It was definitely surprising to see shares up as much as they are," said Tim Radford, an analyst at Rivkin Securities Pty. Ltd. in Sydney. "We could see those gains erode into the close given [weakness in] the rest of the region as investors focus on broader concerns, namely the U.S. economy."

Traders at IG in Melbourne said market volumes had been lighter than usual.

At 0215 GMT, the benchmark S&P/ASX 200 index was 0.7% higher at 5274.5, still in sight of the five-year high of 5300.1 hit during trading last Thursday. Strength in the banks, energy and mining sectors added to the broad-based gains.

National Australia Bank was 1.5% higher, while rival lenders Commonwealth Bank, ANZ and Westpac were each up between 0.2% and 0.7%.

David Jones jumped 6.5% on the back of what IG market strategist Evan Lucas said was a solid full-year result given retail market conditions, and after the company declared a slightly higher-than-expected dividend. Shares in rival Myer were up 1%.

BHP Billiton's shares were up 0.5% after a blunt assessment from the miner of the pressure increased supply would put on prices, and a more positive longer-term view of growing demand for some of its industrial-metals, energy and agricultural products.

Resilience in the iron-ore price helped lift Fortescue Metals 3.5%, with sentiment further supported by Chairman Andrew Forrest's recent purchase of more shares in the company.

Write to Robb M. Stewart at [e-mail]

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