SYDNEY/WELLINGTON, July 27 (Reuters) - Australian and New Zealand shares held steady on Wednesday, with commodity price rises offsetting a soft quarterly inflation figure in Australia.
The S&P/ASX 200 index .AXJO rose 1.83 points to 5,539.3 by 0216 GMT, a gain of 0.03 percent.
Shares had tracked as low as 5,530 points after Australia's Bureau of Statistics published inflation figures showing the slowest annual price growth in 17 years. But the index recovered, as the figure was in line with market and analyst expectations. seem to be possibly seeing a little bit of a buy-the-rumour, sell-the-fact reaction to the inflation data," said CMC Markets chief market strategist Ric Spooner.
"It's come in as expected, but we have seen a small move downward since and there's been a little bit of selling of yield type stocks like banks and Telstra."
Australia's central bank meets next week to set interest rates, which are at an all-time low, and the CPI figure of 1 percent is well below their inflation target range of 2 to 3 percent.
Mining stocks were among the biggest gainers on the Australian bourse, underpinned by a 5 percent jump in Chinese iron ore futures DCIOcv1 .
Fortescue Metals Group FMG.AX stocks surged 7.4 percent to a near two-year high as the miner announced a rise in quarterly iron ore shipments and lowered its production cost target. Billiton Ltd BHP.AX gained 4.1 percent, spin-off South32 Ltd S32.AX rose 1.6 percent and Rio Tinto (LON:RIO) Ltd RIO.AX shares rose 2.4 percent.
Shares in bulk grain handler Graincorp Ltd GNC.AX fell as much as 7 percent after media reports that its largest shareholder, Archer Daniels Midland Co ADM.N wished to sell its stake. stocks edged higher, but other sectors fell as investors sold defensive stocks. Shares in Australia's biggest telecom, Telstra Corporation Ltd TLS.AX , fell 0.61 percent and Australia's Big Four banks, Commonwealth Bank CBA.AX , National Australia Bank NAB.AX , Westpac WBC.AX and ANZ ANZ.AX all edged lower by more than 0.3 percent.
New Zealand's benchmark S&P/NZX 50 index .NZ50 added 0.11 percent or 7.78 points to 7,318.17.
The biggest gainers were Fletcher Building FBU.NZ , up 1.3 percent after a government commissioned report this week showed that construction activity is at an all time-high in New Zealand.
Ryman Healthcare RYM.NZ slipped 0.7 percent. While the company announced it had bought a site in Auckland for a NZ$200 million development it also said its first-quarter trading was in line with expectations.
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