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Australian shares end higher after China cuts tariffs on U.S. imports

Published 06/02/2020, 05:35 pm
Updated 06/02/2020, 05:36 pm
© Reuters.  Australian shares end higher after China cuts tariffs on U.S. imports
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* Strength in copper prices help miners

* CSL pushes healthcare sector to all-time peak

* NZ closed for a public holiday (Updates to close)

By Soumyajit Saha

Feb 6 (Reuters) - Australian shares ended more than 1% higher on Thursday after Beijing said it would halve tariffs on some goods imported from the United States, in a move that could improve Sino-U.S. ties ahead of talks on Phase 2 of the trade deal.

The S&P/ASX 200 index .AXJO closed 1.1% higher at 7,049.2, having gained 0.4% on Wednesday.

Asian shares also cheered Beijing's unexpected announcement, which could ease one of the biggest risks to global economic growth that has also been threatened by the coronavirus epidemic in China, Australia's biggest trade partner.

The decrease in tariffs was widely read as a positive step towards resolving the Sino-U.S. trade conflict following the signing of a Phase 1 trade deal in January, CommSec market analyst James Tao said.

The financials subindex .AXFJ ended 1.4% higher, underpinned by gains in the "Big Four" banks.

The country's two biggest lenders Commonwealth Bank of Australia CBA.AX and Westpac Banking Corp WBC.AX advanced 1% and 1.7%, respectively.

Sentiment was also supported by a firmer finish on Wall Street on Wednesday after encouraging U.S. economic data.

Traders cited unconfirmed reports of possible medical advances for the coronavirus as a trigger for Wednesday's rally, although they also said such a catalyst was likely to be an excuse for short-covering. World Health Organization, however, played down media reports of "breakthrough" drugs being discovered to treat people infected with the new virus.

Strength in copper prices helped mining stocks .AXMM extend gains into a third consecutive session.

Heavyweights BHP Group BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX , which together own the majority of the world's biggest copper mine in Chile, added 1.7% and 0.7%, respectively.

The healthcare subindex .AXHJ rose 1.2% to close at a record high, as heavyweight CSL Ltd CSL.AX surged 1.6% after Morgan Stanley (NYSE:MS) upgraded the company's rating and price target.

Meanwhile gold stocks .AXGD suffered a second straight session of losses as investors moved away from the safe-haven asset.

New Zealand's financial markets were closed for a holiday.

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