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Australian shares rise on firmer mining lead, NZ drops

Published 27/02/2019, 12:33 pm
© Reuters.  Australian shares rise on firmer mining lead, NZ drops
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* Firming commodity prices support miners

* Rio gains ahead of FY results

* Bellamy's slumps as China regulatory delays persist

By Shreya Mariam Job

Feb 27 (Reuters) - Australian shares rose on Wednesday as higher commodity prices pushed resources and energy stocks up, however, investors remained cautious as they await more details on U.S.-China trade talks.

The S&P/ASX 200 index .AXJO rose 0.3 percent, or 19.3 points, to 6,147.7 by 0129 GMT. The benchmark fell 0.9 percent on Tuesday.

Overall gains in mining stocks propped up the benchmark, with global miner BHP Group BHP.AX up about 1 percent.

A weaker U.S. dollar lent support to dollar-priced commodities, which have been cheering signs of progress in trade talks between the world's top two economies.

"It has been bullish the miners for a while. I think commodity prices will continue to strengthen," said Michael Gable, founder and managing director of Fairmont Equities, citing easing trade tensions from last year.

Rio Tinto (LON:RIO) RIO.AX edged higher, hours ahead of its full year results announcement.

However, smaller mining peer Oz Mineral Ltd OZL.AX pared earlier gains as the company recorded a slip in underlying annual profit, but said a better-than-expected performance at its Prominent Hill project was expected to drive future growth. prices rose, supporting local energy stocks .AXEJ , after news that OPEC planned to continue production cuts despite comments from Trump, who criticized the producer group for rising crude prices a day earlier. O/R

Santos STO.AX , which was trading ex-dividend on Tuesday, rose 1.5 percent, while rival Woodside Petroleum WPL.AX added 1 percent.

Clouding sentiment, however, was caution as investors awaited details on a possible trade deal between the United States and China after President Donald Trump said on Sunday he would delay an increase in U.S. tariffs on Chinese goods. waiting to see what happens in China, what happens with the trade deal and that will be reflected in commodity prices which will push our markets higher," said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.

Elsewhere, organic infant formula maker Bellamy's Australia BAL.AX reported a 63.7 percent plunge in first half net profit hurt by regulatory delays in China sending its shares down as much as 10 percent to a more than one month low. Zealand's benchmark S&P/NZX 50 index .NZ50 dropped 0.2 percent or 16.02 points to 9,307.11.

Shares of Air New Zealand AIR.NZ dropped 1.5 percent, sitting at its lowest in nearly two years, a day after it announced it would slash domestic fares by up to 50 percent.

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