Australia shares jump as RBA policy shift boosts financials, miners; NZ up

Published 07/02/2019, 12:27 pm
Updated 07/02/2019, 12:30 pm
© Reuters.  Australia shares jump as RBA policy shift boosts  financials, miners; NZ up
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* RBA Gov Lowe's dovish slant boosts sentiment, drives down AUD

* Financials extend relief rally, recovering after stumble on CBA's miss

* Sliding Aussie dollar boosts commodities, healthcare

* Metals and mining index at 7 year high

By Rashmi Ashok

Feb 7 (Reuters) - Australian shares rallied on Thursday as investors lapped up signs the nation's central bank could ease rates again this year, which sent the local dollar tumbling and boosted exports-led stocks such as commodities and healthcare.

The S&P/ASX 200 index .AXJO rose 0.91 percent or 54.70 points to 6,080.80 0024 GMT, having gained 0.3 percent on Wednesday.

The impetus came from the Reserve Bank of Australia Governor Philip Lowe, who on Wednesday opened the door to a possible rate cut in the wake of growing economic risks and sent the Australian dollar sliding. AUD/

"The Aussie dollar significantly weakened... which is great news for our exporters, healthcare and commodities particularly," said Damian Rooney, director of equity sales at Argonaut.

The metals and mining sub-index jumped 1.5 percent to its highest level since Feb. 2012, rising for a third straight session.

Miners were also bought on concerns of a supply squeeze after a move by the Brazilian state of Minas Gerais to cancel Vale SA's VALE3.SA licence in the wake of a deadly mining disaster. behemoth BHP Group BHP.AX rose 0.6 percent while rival Rio Tinto (LON:RIO) RIO.AX gained over 2 percent.

Energy stocks .AXEJ jumped more than 1 percent for their fourth straight session of gains, after a rise in oil prices on Wednesday amid signs of strong U.S. demand and tightening global crude supply. O/R

Healthcare stocks .AXHJ , which have exposure overseas, appeared to be driven up by a weaker Australian dollar. Sector heavyweight CSL CSL.AX rose 0.6 percent and Ramsay Health Care RHC.AX up nearly 1 percent.

Financial stocks .AXFJ , which typically benefit in a low-rates environment due to their attractive yields, rose over 1 percent. All of the "Big Four" banks were in the black, led by Westpac Banking Corp WBC.AX , up about 1.5 percent.

"The financials continue to have the relief rally... our view is that it lacked real teeth and other than the headlines, will make very little difference to the banks themselves," said Damian Rooney, director of equity sales at Argonaut.

He was referring to the Royal Commission's final report, which excoriated the financial sector for widespread misconduct but stopped short of recommending any changes that would challenge their market dominance.

Top lender Commonwealth Bank of Australia's CBA.AX disappointing earnings on Wednesday had weighed on the sector. CBA bounced back and rose as much as 1.6 percent on the day.

New Zealand's benchmark S&P/NZX 50 index .NZ50 0.6 percent or 57.50 points to 9,131.22.

Synlait Milk SML.NZ was the top gainer on the kiwi benchmark, surging 7.5 percent, while a2 Milk Company ATM.NZ also rose.

Global dairy prices rose at an auction held early on Thursday, led by gains for key product whole milk powder.

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