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Australian shares edge higher but gold stocks cap gains, NZ falls

Published 06/11/2019, 12:04 pm
Updated 06/11/2019, 12:07 pm
© Reuters.  Australian shares edge higher but gold stocks cap gains, NZ falls
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* Banks on track for second day of gains

* Gold stocks dip

* Boral falls after flagging weak first half

By Shriya Ramakrishnan

Nov 6 (Reuters) - Australian shares inched higher on Wednesday, helped by the banking and energy sectors, but gains were checked by a fall in gold stocks on renewed Sino-U.S. trade optimism.

The S&P/ASX 200 index .AXJO rose 0.1% or 3.2 points to 6,700.3 by 0033 GMT. The benchmark ended 0.2% higher on Tuesday.

Financial stocks .AXFJ rose after the central bank left interest rates unchanged on Tuesday. The "Big Four" banks gained between 0.4% and 0.8%.

The Reserve Bank of Australia held interest rates steady as expected at its policy review, as it gauged the impact of three cuts already delivered this year, while leaving the door ajar for further stimulus if needed. is a lot of talk that with the official cash rate at 0.75%, there is very little room for banks to cut deposit rates any further....so further interest rate cuts would mean margin compression," Michael McCarthy, Chief market strategist at CMC Markets said.

The banking sector has come under pressure of late after Australia and New Zealand Banking Group ANZ.AX and Westpac Banking Corp WBC.AX reported weaker results due to record low interest rates and tougher competition.

National Australia Bank NAB.AX will report on Thursday, and the country's top lender Commonwealth Bank of Australia CBA.AX the week after.

Energy stocks .AXEJ were poised for a fourth day of gains, boosted by higher oil prices. Oil refiner and retailer Viva Energy Group VEA.AX led gains in the sector with a 1.5% advance, while heavyweight Oil Search OSH.AX traded 1.3% higher.

Gold stocks fell 2.9%, dented by a fall in prices of the safe-haven metal, as increasing optimism over a U.S.-China trade deal spurred investors' appetite for riskier assets. GOL/

However, a rally in global equity markets took a breather in early Wednesday, after China pressed U.S. President Donald Trump to remove recently imposed tariffs. MKTS/GLOB

The mining sub-index .AXMM ticked up 0.1%, tracking strength in copper and iron ore prices. BHP Group BHP.AX , the world's biggest miner added 1.4%, while copper miner OZ Minerals OZL.AX gained 2.6%.

Meanwhile, building materials maker Boral Ltd BLD.AX was among the top drags on the ASX 200, sliiding 3% in its worst day since Aug. 26. The company on Wednesday warned of a weaker fiscal 2020 first half amid project delays and a softer housing market. the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.7% or 78.8 points to 10,762.76.

New Zealand stock exchange operator NZX Ltd NZX.NZ delayed the opening of markets for almost three hours on Wednesday because of "systems issues" in the derivatives market. company a2 Milk ATM.NZ slipped 3.7%, while New Zealand Refining Company NZR.NZ shed 0.5%.

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