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Australian shares scale all-time peaks ahead of trade deal, NZ gains

Published 15/01/2020, 12:48 pm
© Reuters.  Australian shares scale all-time peaks ahead of trade deal, NZ gains

* Trump to sign Phase 1 deal with China's He later in the day

* Mining stocks at over five-month high

* Resolute Mining rises on deal to sell Ravenswood gold mine

By Shriya Ramakrishnan

Jan 15 (Reuters) - Australian shares scaled record highs on Wednesday, buoyed by gains in the mining sector, ahead of the signing of a preliminary trade pact between China and the United States.

As of 0104 GMT, the S&P/ASX 200 index .AXJO was up 0.3% at 6,980.3. The benchmark ended 0.9% higher on Tuesday.

U.S. President Donald Trump is slated to sign the Phase 1 trade agreement with Chinese Vice Premier Liu He at the White House later in the day.

China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, Reuters reported, citing a source briefed on the Phase 1 trade deal. capping broader confidence was U.S. Treasury Secretary Steven Mnuchin's comments stating that the United States will maintain tariffs on Chinese goods until the completion of a second phase of a U.S.-China trade agreement. contentious trade talks cast a pall over markets for much of 2019 until signs a deal was in place late last year helped lift global equities.

"There is still a lot of speculation on what the deal is going to deliver. There is still a fair amount of intention to do the right thing, but as always the proof is in the pudding," Damian Rooney, director of equity sales at Argonaut said.

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Australia's mining stocks .AXMM rose 0.5%, hitting their highest since Aug. 1, 2019. Shares of BHP Group BHP.AX , the world's largest miner and the country's largest stock in terms of market value, soared to a nearly one-month high, providing a major boost to the overall index.

Investors will shift focus to quarterly reports from miners and energy players, that is scheduled to kick off on Thursday.

Trading activity in the Australian market was however low, with volumes only at a fraction of their 30-day average.

"A lot of focus in the land down under is being taken up with the terrible fires ... I think it just resonates and is a slight concern of the social and economic impact going forward," Rooney said.

Australia is going through its worst bushfire season on record, with fires burning since September taking 28 lives, and destroying more than 2,500 homes. stocks .AXGD jumped 2.6%, with Evolution Mining EVN.AX and St Barbara SBM.AX adding 4.4% and 5.5%, respectively.

Gold miner Resolute Mining RSG.AX gained as much as 3.4%, after announcing a deal to sell its Ravenswood Gold mine for up to A$300 million ($207 million) to a consortium led by resource-focused private equity firm EMR Capital. stocks .AXEJ also lent support to the local benchmark, rising 0.6% to a near one-week high. Oil and gas explorer Beach Energy Ltd BPT.AX added 4%, while Papua New Guinea-focused Oil Search OSH.AX rose 1.2%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.3%, or 35.48 points, to 11,660.61.

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Electricity retailer Genesis Energy Ltd GNE.NZ and Auckland International Airport AIA.NZ were among the top gainers on the benchmark, rising as much as 1.9% and 1.5%, respectively.

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