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Australia, NZ shares scale fresh peaks on Wall Street strength, trade deal

Published 17/01/2020, 12:29 pm
© Reuters.  Australia, NZ shares scale fresh peaks on Wall Street strength, trade deal
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* Aussie benchmark could hit 7,200 before month-end - analyst

* Mining stocks at near six-month high

* Crop protection firm Nufarm slumps on dismal outlook

By Shriya Ramakrishnan

Jan 17 (Reuters) - Australian shares extended gains to a fresh high on Friday, tracking a robust lead from Wall Street, on continued optimism stemming from a long-awaited preliminary U.S.-China trade pact.

As of 0057 GMT, the S&P/ASX 200 index .AXJO was up 0.5% at 7,075. The benchmark ended 0.7% firmer on Thursday, and was poised to record a weekly gain of 2.1%.

Providing a fillip to investor confidence was strong retail sales data and upbeat corporate earnings reports, which pushed the S&P 500 through the 3,300 mark for the first time on Thursday, while the other main U.S. indexes also rallied to record highs. .N

"The general sentiment is just bullish and the fear of missing out is also strong ... it looks as though we could hit 7,200 before the end of the month, after which we get into the reporting season where we might get a little bit of a reality check," Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter said.

Risk appetite has largely improved after Beijing and Washington inked a Phase 1 trade pact on Wednesday, marking a major step in defusing the prolonged spat that has rattled financial markets and weighed on global growth.

"The important thing is now is there a line in the sand. Although tariffs weren't rolled back, it does mean that in the short-term things are not going to get any worse and markets are taking that very positively," Jennings added.

Mining stocks .AXMM were the top boost to the Aussie benchmark, jumping 1.1% to their highest since July 25 last year.

Anglo Australian miner Rio Tinto (LON:RIO) Ltd RIO.AX gained 1.8%, as it forecast higher iron ore shipments for 2020. Group BHP.AX , which is set to report its second-quarter production figures next week, advanced as much as 0.9%, while Fortescue Metals Group FMG.AX added 2.2%.

Investors will also keep a close eye on a raft of economic data due later in the day for China - Australia's largest trading partner and major buyer of its commodities.

Gains in Australia's 'Big Four' banks propelled the heavyweight financial stocks .AXFJ 0.5% higher, putting them on track for a fourth straight session of gains.

Commonwealth Bank of Australia CBA.AX , the country's largest lender, rose up to 0.6% to its highest in nearly two-and-half years, while Westpac Banking Corp WBC.AX added 0.7%.

Crop protection firm Nufarm Ltd NUF.AX slid as much as 15.6% and was the worst performer on the Aussie benchmark, after it warned that its first-half core earnings will likely halve from last year, citing challenging conditions across its markets. New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.5% to a fresh peak of 11,793.97.

Dairy firm a2 Milk ATM.NZ and Gentrack Group Ltd GTK.NZ were the top percentage gainers, rising 2.2% and 1.1%, respectively.

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