Australia Stocks Rise as Banks Lead Broad Recovery

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--Australian shares staged a broad recovery Thursday, as banks rebounded and mining stocks benefited from a rise in commodity prices.

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Still, the shine came off the market late in the session after South Australia state announced plans for a fresh tax on the country's biggest lenders that will have the same structure as a new federal levy.

Snapping a run lower the last two days, including the sharpest drop of the year on Wednesday, the S&P/ASX 200 picked up 40.3 points, or 0.7%, to 5706.0. The index had been as much as 1% higher shortly before the close.

Although off their peaks of the session, the four largest banks collectively added almost 18 points to the ASX 200. The financial sector led the day's gains as it found buyers after steady selling over the last few weeks on concerns over the housing market, a lackluster outlook for revenue growth and a federal tax that was passed by parliament early this week.

The federal tax on the liabilities of big banks as well as investment bank and asset manager Macquarie is projected to raise up to 1.6 billion Australian dollars (US$1.2 billion) a year to help bring the government budget into balance. On Thursday, South Australia Treasurer Tom Koutsantonis said the state would tax the same five banks' bonds and deposits to help fund job initiatives, bringing in an expected A$370 million over the next four years.

Westpac Banking and National Australia Bank each rose 1.4%, Commonwealth Bank of Australia added 1.3%, Australia & New Zealand Banking was 1.2% higher and Macquarie gained 1.1%. The Big Four are still down 0.8% on average so far this week, while Macquarie is 0.2% weaker.

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Diversified miners BHP Billiton and Rio Tinto were up 0.2% and 0.6%, respectively, and Fortescue Metals Group climbed 3.8% after Chinese iron-ore futures rose.

Energy stocks also bounced back from losses in the early part of the week, as oil prices steadied in Asian trading after dropping deeper into bear-market territory overnight. Woodside Petroleum edged up 0.1%, Oil Search advanced 2.2% and Santos rose 1%.

For the session, 2.12 billion shares totaling A$5.63 billion were traded, Commonwealth Securities said.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 22, 2017 03:29 ET (07:29 GMT)