Iron Ore Buoys Australian Shares as They Lead Asia Equities

By Lucy Craymer Features Dow Jones Newswires

Australian shares, with a lift from rebounding metals, outperformed other Asian-Pacific equities after U.S. stocks were little changed.

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Australian stocks recovered some after its S&P/ASX 200 logged its biggest drop of the year on Wednesday, when it fell 1.6%. The index was recently up 0.5% thanks to a nearly 1% increase in beaten-down iron-ore prices. Shares of miners Rio Tinto and BHP Billiton also rose about that much.

The overnight metals rebound led to bargain hunting in Australian stocks, said Tim Kelleher, head of institutional FX sales in New Zealand for Commonwealth Bank of Australia. He also noted that although oil slid again overnight, equities rose to start Thursday, while Wednesday's declines in Asia had been attributed to a fall in oil.

Investors are justifying buying stocks because metal prices are higher, Mr. Kelleher said. "It's a funny, fickle beast the Australian stock market."

Oil prices, which fell a further 2% overnight on growth in weekly U.S. crude production, were up 0.2% in Asian trading, with Brent futures at $44.90 a barrel.

Stocks in Korea also rebounded, with the Kospi up 0.4%. Meanwhile, Chinese equities logged further modest gains. MSCI Inc. agreed early Wednesday to include China's A-shares in its emerging-markets index.

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Elsewhere, New Zealand's NZX-50 index rose 0.3% as the country's central bank opted to leave the cash rate unchanged and retain a largely neutral monetary-policy bias. The Reserve Bank of New Zealand's lack of movement was in line with market expectations, although there had been concerns that dovishness could emerge, the Bank of New Zealand said.

"But it didn't, which we were pleased to see," the bank added.

The New Zealand dollar rose to session highs after the announcement but has pulled back since, recently up 0.3% at US$0.7245.

Stocks in Japan and Hong Kong were slightly higher in morning trading while Taiwan's Taiex rose 0.3% and earlier hit its highest intraday level since 1990.

Write to Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

June 21, 2017 23:13 ET (03:13 GMT)