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Australia shares end firmer as RBA leaves door open for more rate cuts; NZ up

Published 17/09/2019, 04:35 pm
© Reuters.  Australia shares end firmer as RBA leaves door open for more rate cuts; NZ up
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* CSL Ltd boosts healthcare sector

* Miners hit by lower iron ore prices

* Energy stocks continue to gain (Updates to close)

By Nikhil Subba

Sept 17 (Reuters) - Australian shares rose on Tuesday, with the healthcare sector leading gains, as minutes of the central bank's September policy meeting affirmed it was open to further rate cuts, helping the benchmark index recoup earlier losses.

The S&P/ASX 200 index .AXJO inched 0.3% or 21.8 points higher to 6695.30 at the close of the session, after much of the day's trading was pressured by uncertainties over tensions in the Middle East following attacks on Saudi oil facilities. The benchmark closed 0.1% higher on Monday.

Minutes of the Reserve Bank of Australia's (RBA) Sept.3 meeting, released earlier in the day, showed the central bank would consider additional easing if needed to support growth and achieve its 2% to 3% inflation target. markets 0#YIB: are fully priced for another rate cut to 0.75% by year-end, and to 0.5% by early 2020.

"The Reserve Bank conveyed a more cautious global and domestic outlook in its September Board Minutes, paving the way for a rate cut soon," NAB analyst Kaixin Owyong said.

The healthcare sector .AXHJ climbed over 1% and was the session's best performer. Index behemoth CSL CSL.AX , which benefits from a weaker Aussie dollar since its has international revenue streams, climbed almost 2% to a one-week high.

Attacks over the weekend on Saudi facilities led to a sharp spike in oil and fuel prices. Shane Oliver, chief economist at AMP Capital, said this could reduce consumer spending in Australian households, and would be another reason to expect further monetary easing from the RBA.

An oil-backed rally in energy stocks .AXEJ calmed down a little as Brent crude prices slipped about 1%. Brent had surged nearly 20% at one point on Monday after the attacks. O/R

The energy subindex still managed to rise 0.7%, following a 4.3% jump on Monday.

Oil and Gas major Woodside Petroleum WPL.AX rose nearly 2%, while Santos Ltd STO.AX climbed nearly 1%.

Financial stocks .AXFJ also cheered the RBA's indications, gaining 0.5% at close, with three of the "Big Four" banks in positive territory.

But gains on the Australian benchmark were limited by the mining index .AXMM , which ended about 1% lower, hit by a fall in iron ore and steel prices after data showed a deepening slowdown in China's economy. Heavyweights BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX each closed about 1.5% down.

New Zealand's benchmark S&P/NZX 50 index .NZ50 climbed 0.3% or 36.28 points to finish the session at 10,868.03.

Agribusiness firm Scales Corp SCL.NZ ended the session almost 4% higher, while freight services provider Mainfreight Ltd CNU.NZ gained about 3% at close.

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