Australian shares rose on Monday, helped by strength in the financial sector, which accounted for more than half the gains on the index. The S&P/ASX 200 index was up 0.3 percent, or 15.27 points, to 5,789.30 by 0431 GMT. The index ended 0.2 percent higher on Friday. The benchmark index is on track to record its sixth gaining session out of seven. The financials index rose as much as 1.1 percent with the “Big Four” banks gaining between 0.7 percent and 1.4 percent.
Investors were responding to the acknowledgement by Australia’s five biggest lenders that they would be able to pay a new annual levy of about A$4.6 billion without disrupting the financial system or being driven offshore, although they had lobbied hard against the proposed charge. The desire for high dividend yields – which are a feature of Australian banking stocks – was a driving factor in financial sector buying on Monday, said Michael McCarthy, chief market strategist at CMC Markets.
Sentiment was also boosted by comments from central bank governor Philip Lowe, who said Australia’s economy was likely to grow a bit faster over the next couple of years. Packaging company Amcor Ltd rose 1.2 percent, hitting a one-year high, although consumer staples fell with Woolworths Limited shedding 3.9 percent. Energy stocks declined. Oil and gas producer Woodside Petroleum Ltd lost 0.9 percent to its lowest in more than six months.
Oil prices reversed Friday’s gains following a steady rise in U.S. production, undermining OPEC’s efforts to curb production in order to tighten supplies.
New Zealand’s benchmark S&P/NZX 50 index rose 0.5 percent or 34.61 points to 7,587.36. New Zealand’s trade minister said on Sunday that the United States has indicated it is open to a free trade agreement (FTA) with export-dependent New Zealand, which might help boost the country’s $180 billion economy.
The index hit a high not seen in more than nine months, extending gains to a fifth straight session, supported by advancing consumer staples and utilities stocks. A2 Milk Company Ltd climbed 6 percent to a record high while Meridian Energy Ltd rose 1.7 percent.