Australia shares post modest gains ahead of Chinese PMI data

Reuters - UK Focus

* Aussie shares trading higher on Wall Street

* Investors to eye Chinese manufacturing data due at 0145GMT (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Naomi Tajitsu

SYDNEY/WELLINGTON, May 22 (Reuters) - Australian shares rose0.7 percent on Thursday, buoyed by gains on Wall Street and anuptick among local banks, while investors awaited a Chinesemanufacturing survey later in the day for clues about growth inAustralia's largest export market.

The S&P/ASX 200 index added 40.5 points to 5,465.1by 0115 GMT, outperforming MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacificshares outside Japan, which was up 0.4 percent.

All 'Big Four' banks rose, with top lender Commonwealth Bankof Australia adding 0.5 percent.

Overnight, spot iron ore prices fell for a fourth straightday to a 20-month low, pressured by weak buying interest fromchina, the world's top consumer of the steelmaking raw material.

Meanwhile heavyweight miners Rio Tinto Ltd (Xetra: 855018 - news) and BHPBilliton Ltd added 0.4 percent and 1.2 percent each,recovering modestly after being sold off over the past week.Investors will also eye the Chinese HSBC flash manufacturing PMIfor May due at 0145 GMT.

"If the PMI number is outside of expectations significantlyit will affect the big three, Rio, BHP, Fortescue", said ShawnHickman, managing director at Market Matters

"The market is a bit 50/50, so we just want to see it playits hand, the whole region is up around 0.4 percent, there's nota great deal at the moment."

Energy stocks also rose, underpinned by U.S. oil reaching aone-month high overnight. Woodside Petroleum Ltd (Other OTC: WOPEF - news) climbed 2 percent, while Santos Ltd added 1.1 percent.

Australia's benchmark index has been drifting sideways inMay, pulled down by top-tier banking stocks with investorsbooking profits as shares have reached record highs, butunderpinned by robust earnings.

Worries over geopolitical tensions in Ukraine and slumpingiron ore prices have also dampened investor appetite.

U.S. stocks rose overnight, rebounding from the previousday's broad selloff, after minutes of the Federal Reserve's lastmeeting showed central bankers have discussed the eventualtightening of monetary policy but made no decisions on whichtools to use.

Treasury Wine Estates Ltd dropped 1.2 percent. Thestock had gained some 24 percent in the previous two sessionsafter it rejected a $2.9 billion bid from Kohlberg KravisRoberts & CO LP, spurring talks of offers from other parties.

James Hardie Industries PLC (Other OTC: JHIUF - news) jumped 2.8 percentafter the home building products manufacturing announced itsfourth quarter net sales were higher at A$376.4 million whilealso ananouncing a special dividend of $0.20 per security.

Caltex Australia (Other OTC: CTXAY - news) gained 2.3 percent after receivingconfirmation from the Australian Competition and ConsumerCommission (ACCC), who will not oppose its acquisition of thefuel division of Scotts Group.

New Zealand's benchmark NZX 50 index edged up 0.4percent to 5,130.25, as gains in transport company Freightways and Fisher & Paykel Healthcare helped the index torecover from a one-month low hit on Wednesday.

Fisher & Paykel Healthcare is expected to announce anincrease in full-year profits when it posts results on Friday,after the medical equipment maker raised its profit forecast toNZ$97 million ($82.97 million) earlier this year.

Shares in telecommunications network operations Chorus Ltd tumbled roughly 4 percent after the industry regulatorsaid it would delay a final decision on broadband pricing.

"(The delay) pushes out the time frame of the pricing issuepossibly being resolved. It has added uncertainty ... and thatwould be seen as negative," said Michael Milne, investmentadvisor at Craigs Investment Partners.

But Milne added that the delay would give the company theopportunity to offer more input into the pricing process, whichcould be beneficial in the longer term.

Investors awaited full-year results from online accountingsoftware developer Xero later in the day for more hintsinto the fast-growing company's performance in the UnitedStates, where it has been expanding aggressively.

(Reporting by Thuy Ong; Editing by Kim Coghill)

View Comments (0)