The S&P/ASX 200 index snapped back into the back in late trade after staying down for much of session, closing up 0.14 percent or 8.40 points at 5,849.20.
Australian shares turned higher on Friday as a report suggesting U.S. President Donald Trump was taking steps to resolve a trade dispute with China bouyed risk appetite in the region, with firms exposed to the Asian economic giant getting a lift. The S&P/ASX 200 index snapped back into the back in late trade after staying down for much of session, closing up 0.14 percent or 8.40 points at 5,849.20. That took weekly gains to 3.3 percent, having risen about 0.2 percent on Thursday.
The afternoon uptick came after Bloomberg reported that Trump is interested in reaching a trade deal with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month, and has asked key U.S. officials to begin drafting terms for a potential agreement. Materials stocks, especially miners dominated the gains, with the metals and mining index climbing 1.3 percent. China is Australia’s biggest trade partner and is a major buyer of its commodities. Miners also benefitted from a jump in Shanghai copper prices and overnight gains in gold prices.
Anglo-Australian miner BHP firmed 1 percent, while its rival Rio Tinto Ltd tacked on 0.2 percent. Healthcare stocks also underpinned the market with a rise of 1.5 percent, with drugmaker CSL, whose second-biggest market is China, climbing 2.1 percent. The financial sector gave up 0.4 percent. Still, it enjoyed a positive week overall, gaining 3.5 percent as investors scooped up stocks that have been heavily sold down this year following damaging revelations of misconduct in the sector.
Sector heavyweight Commonwealth Bank of Australia shed 0.9 percent and Westpac Banking Corp fell 0.6 percent, with both due to announce earnings in the week ahead. “The sell-off has been going on for quite some time… but there’s the ongoing factor where recent results have been suggesting that asset growth is slowing and margins remain under pressure. Those factors are leading to further deteoration in the earnings outlook,” said Damien Hennessy, co-founder at Heuristic Investment Systems. New Zealand’s benchmark S&P/NZX 50 index inched 0.09 percent or 8.23 points lower to end the session at 8,835.60. Airline operator Air New Zealand Ltd fell 0.8 percent at close.