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Australia shares end marginally higher; NZ down

Published 09/09/2019, 04:40 pm
Updated 09/09/2019, 04:50 pm
© Reuters.  Australia shares end marginally higher; NZ down
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* Financials only sector to close higher

* NZ Q2 manufacturing sales volumes down 2.7%

* Aussie gold stocks slump the most (Updates to close)

By Nikhil Subba

Sept 9 (Reuters) - Australian shares closed marginally higher in cautious trade on Monday, with the benchmark index propped by financial sector firms as investors awaited global central banks to provide more stimulus for a slowing global economy.

The S&P/ASX 200 index .AXJO closed the day's session 0.01% higher at 6,648.00, following a 0.9% climb on Friday.

Locked in a trade war for more than a year, China and the United States both posted weak economic data over the weekend, strengthening hopes for more monetary stimulus, and improving investors' appetite for riskier assets. U.S. Fed last week indicated more rate cuts ahead, while China's central bank said it would reduce the amount of cash that banks must hold as reserves, to make more funds available for lending. European Central Bank is expected to cut interest rates on Thursday.

Expectations of lower U.S. and European interest rates have benefited the Australian dollar, a proxy for risk assets.

"It's mainly the rate cut view for the U.S. and Europe ... which is boosting our currency ... and the classic currency players tend to be the banks", said Mathan Somasundaram, market portfolio strategist, Blue Ocean Equities.

Australia's "Big Four" lenders all ended the session higher, helping the financial index .AXFJ climb 0.5%, to hold the main benchmark in positive territory.

Meanwhile, the Australian gold index .AXGD dropped 3.3% to close at a two-week low, as a return in risk-on behaviour persuaded investors to switch away from safe haven assets.

Mining heavyweights BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX ended 0.5% and 0.07% lower, respectively.

Energy stocks .AXEJ shed 0.3%, with oil and gas players Woodside Petroleum WPL.AX and Beach Energy BPT.AX slipping 0.4% and 1.2%, respectively.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 slipped 0.1% to close the session at 11,202.93.

New Zealand manufacturing sales volumes fell 2.7% in the second quarter, compared with the previous quarter, data from Statistics New Zealand showed on Monday. volumes for dairy and meat products, the country's biggest export earners, fell 8.2% in the period, the data showed.

Dairy producer A2 Milk ATM.NZ fell 3.3% at close, while agribusiness firm Scales Corp Ltd SCL.NZ ended about 1% down.

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