Australian shares jumped on Tuesday in a broad-based rally driven by financials, after the Dow hit an intraday record high overnight, with a rise in oil prices boosting sentiment. The S&P/ASX 200 index rose 91.314 points or 1.6 percent to 5,775.8 by 0200 GMT. All the sectors on the benchmark were in the black, with advancing issues outnumbering declining ones by a 9.4-to-1 ratio. The S&P 500 and the Dow Jones Industrial Average rose on Monday as energy and bank stocks climbed.
In Australia, financials drove the gains on the benchmark, with Westpac, Commonwealth Bank of Australia, National Australia Bank and Australia New Zealand Banking Group all up more than 1.9 percent. “We have got a strong lead from Wall Street and the financials performed very strongly in the overnight session so that has translated into a good response from Aussie financials,” said Ben Le Brun, a market analyst at OptionsXpress, an electronic trading platform provider.
Aussie lenders were also buoyed by news that opposition lawmakers in the state of South Australia vowed to block a state-based bank tax, a win for the lenders left reeling when the government unexpectedly unveiled a levy in its annual budget to raise revenues.
Meanwhile, energy stocks saw strong support after oil rose more than 2 percent on Monday, resuming its longest stretch of daily gains in more than five years after data pointed to a reduction in U.S. output.
Among the energy stocks, Beach Energy advanced 2.5 percent, while Caltex Australia Ltd was up 2.1 percent. In other commodities, Chinese steel futures climbed more than 3 percent on Monday to their highest since March, supported by a strong demand in the world’s top producer and data showing a recovery in China’s manufacturing activity.
BHP Billiton Ltd climbed 2.8 percent, while Rio Tinto Ltd gained as much as 2.4 percent to hit a six-week high.
New Zealand’s benchmark S&P/NZX 50 index climbed 0.3 percent or 24.46 points to 7,612.89. A survey revealed that New Zealand business confidence was broadly steady in the second quarter of 2017 but a smaller number of firms intended to raise prices, reinforcing the central bank’s determination to keep interest rates on hold.
The gains on the index were driven by Spark New Zealand, which rose as much as 3 percent to record its biggest intraday percentage gain since April 12. Air New Zealand was the other big gainer, rising 2.7 percent to scale a near 16-year high.