MELBOURNE, Australia--Fresh highs for major Wall Street indexes overnight set the tone for a strong finish to the week for Australian shares as banks continued to recover from heavy selling in May.
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The local market advanced Friday for a fourth consecutive day, buoyed by widespread buying as investors picked up stocks caught in last month's fall, the sharpest since January 2016.
Ending near its high of the day, the S&P/ASX 200 gained 50 points, or 0.9%, to reach 5788.1. That left the index 0.6% higher for the week.
"Share markets generally rose over the last week, helped by reasonable economic data and expectations central banks will remain benign," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney. He said that domestic data in recent days had been "messy" and painted a mixed picture ahead of important first-quarter gross domestic product numbers next week.
Most sectors of the Australian market were stronger for the day, although energy stocks were held back by continued weakness in oil prices in Asian trading and utilities were pulled down by a fall in AGL Energy shares after Macquarie lowered its recommendation to underperform from neutral.
The four biggest banks, which carry a heavy weighting in the ASX 200, collectively added almost 13 points to the index. The lenders managed a modest recovery over the week from an average 12% fall in May. Last month's decline came amid lackluster earnings and growing worries over the introduction of a new tax on banks' liabilities, as well as looming regulatory changes widely expected to result in the need for greater capital buffers.
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Commonwealth Bank of Australia rose 1%, Westpac Banking added 0.7%, Australia & New Zealand Banking was 1.2% higher and National Australia Bank gained 1.1%.
Rio Tinto and Fortescue Metals Group each picked up 1.7% and BHP Billiton rose 1.4%, helped by a rise in Chinese iron-ore futures that have fallen heavily since February.
Among energy stocks, Woodside Petroleum slipped 0.3% and Santos lost 1.5%, but Oil Search was up 0.3%. AGL dropped 3.9%.
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(END) Dow Jones Newswires
June 02, 2017 03:35 ET (07:35 GMT)