Australian shares bounced on Tuesday, supported by overnight strength on Wall Street and upbeat U.S. consumer spending data, with gains in the financial sector leading the way.
The S&P/ASX 200 index (xjo) rose 28.2 points, or 0.5 percent, to 5497.6 by 0245 GMT, after hitting its lowest in over a month in the previous session due to concerns of a near-term U.S. interest rate hike.
But strong U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, lifted the mood.
Investors are now turning their attention to U.S. payroll data later on Friday to gauge if the Federal Reserve might be in a position to raise rates before year-end. ECONUS
“It is basically a relief rally from yesterday," said Mathan Somasundaram, a quantitative strategist with Baillieu Holst.
"We are getting a bit of a bounce from the big four banks. But I would expect that as the day goes by we would probably start selling off again and take some profits and probably end up with a small positive day.”
Financials, the biggest constituent on the index, added 0.5 percent with Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) gaining 0.6 percent and 0.8 percent respectively.
The banking sector has been under pressure recently due to slowing earning growth and pressure on margins.
Gains in basic materials were led by Evolution Mining (EVN), which was 5.3 percent higher as gold rebounded from a near five-week low. [GOL/]
Fortescue Metals (FMG) gained 3.5 percent on the back of S&P upgrading its rating outlook. [nASX8VS1gw]
Oil stocks gained as oil futures edged up on a weaker dollar. [O/R] <.DXY>
Oil explorer Oil Search Ltd (OSH) posted a 2 percent gain.
New Zealand's benchmark S&P/NZX 50 index (nz50) was 0.24 percent or 18 points higher at 7385.26.
The rally was led by industrials and utilities with Auckland International Airport (AIA) heading the gains.
Medical devices maker Fisher & Paykel Corp (FPH) and electricity generator and supplier Meridian Energy Ltd (MEL) were among the biggest gainers on the main index.
