October 6, 2016 8:05:30 am
Australian shares recovered some ground on Thursday, led by financial stocks, as encouraging U.S. economic data and strong gains in oil prices boosted confidence. The S&P/ASX 200 index turned around from prior day losses by rising 17.4 points, or 0.32 percent, to 5,470.3 as at 0115 GMT. U.S. services sector activity (ISM services PMI)recovered sharply in September from six-year low hit in August, following similarly upbeat news from U.S. factories on Monday.
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Oil prices rose about 2 percent on Wednesday, hitting their highest since June, after a fifth unexpected weekly drawdown in U.S. crude inventories.
The U.S. Energy Information Administration (EIA) said crude stockpiles fell 3 million barrels last week, confounding analysts polled by Reuters who forecast a build of 2.6 million barrels.
The energy benchmark powered to a one month high. Oil Search Ltd climbed as much as 3.2 percent, while Santos Ltd vaulted 3 percent.
“Energy stocks are getting off to a very strong start across the Asian region as well today,” said Angus Nicholson, market analyst at IG Markets.
“Also, a bit more positivity on the U.S. economy in the wake of that strong ISM services PMI has helped stocks as well,” Nicholson added.
Gains in Australia’s “Big Four” banks sent the financials index up to a one-month high.
Global miner BHP Billiton Ltd advanced as much as 1.8 percent to 11-month high, while Rio Tinto rose as much as 1.3 percent to hit a five month high.
Australian Pharmaceutical Industries Ltd gained 5.3 percent after it raised its earnings guidance.
Australian shares of News Corp jumped as much as 4.7 percent to a 10-month high.
Bucking the trend, Estia Health Ltd tumbled as much as 12.3 percent to a one-month low after trimming its earnings guidance.
New Zealand’s benchmark S&P/NZX 50 index fell for a third straight session, dipping 0.6 percent, or 41.6 points, to 7,229.4.
Financials and healthcare were the biggest drag on the benchmark.
Heartland Bank Ltd dropped 3.3 percent, while Orion Health Ltd shed 1.2 percent.
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