Australian shares rose to a nearly two-year high on Monday, bucking regional weakness, as higher oil and metal prices helped offset concerns over growing geopolitical tensions after U.S. missile strikes on Syria. The S&P/ASX 200 index rose 39.31 points or 0.7 percent to 5,901.7 by 0304 GMT. Shares of oil producers rose as crude prices extended gains, supported by strong demand and political uncertainty in Syria. Top aides to U.S. President Donald Trump differed on Sunday on where U.S. policy on Syria was headed after last week’s attack on a Syrian air base, while U.S. Secretary of State Rex Tillerson warned the strikes were a warning to other nations, including North Korea.
“Energy and material stocks have got some support from strong commodity prices,” said Tony Farnham, economist at Paterson Securities. “Now the focus would shift to economic indicators such as the Australian business survey numbers” he added. The benchmark energy index climbed 0.8 percent to its highest in 19 months, with shares of WorleyParson gaining 3.4 percent and Oil Search Ltd rising 1.2 percent. Higher nickel and aluminium prices supported the material sector. Large cap miner BHP Billiton hit its highest in nearly three weeks, while nickel miner Western Areas Ltd was up 0.4 percent.
Financials, the biggest index constituent also rose with the ‘Big Four’ banks gaining between 0.6 percent and 1.05 percent. “We are looking ahead to the reporting season of the Australian banks, three of them at least,” said Ric Spooner, Chief market strategist at CMC markets. “People now would be a bit wary of selling the banks too much as we are anticipating that there will be some pretty good results,” he added. New Zealand shares were little changed with the benchmark S&P/NZX 50 index steady at 7,250.17 points at 0218 GMT..
Gains in consumer staples were offset by losses in industrial and real estate stocks. Honey producer Comvita Ltd <CVT.NZ. was the top performer, rising 2.6 percent.