Australia Stocks Rise for Second Day, Supported by Resources

By Robb M. Stewart Features Dow Jones Newswires

A second straight day of solid gains, led by resources companies, propelled Australian shares to their highest finish in three weeks on Wednesday.

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The buying came as the local currency retreated against the U.S. dollar, squeezed by data showing consumer-price inflation was muted in the second quarter. It also came after Reserve Bank of Australia Gov. Philip Lowe suggested the central bank was comfortable with interest rates staying at record lows.

The S&P/ASX 200 rose 50 points, or 0.9%, to close at 5776.6. Only consumer-discretionary stocks and utilities failed to move higher. It was the strongest one-day gain in two weeks.

Energy stocks advanced as crude oil built on an overnight rally in Asian trading, bolstered by expectations U.S. inventories have fallen sharply since last week.

Mining companies also notched a strong session as Chinese iron-ore futures rose on renewed confidence in demand and prices for base metals improved.

The major banks, among the biggest stocks in the local market, also lent their weight to the push higher. Sentiment toward the sector improved last week after the cloud of possible dilutive capital raisings was lifted when the industry regulator introduced fresh capital benchmarks that analysts say won't prove too onerous.

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Among energy shares, Woodside Petroleum rose 2.3%, Oil Search added 3.2% and Santos rallied 5.3%.

Diversified mining companies BHP Billiton and Rio Tinto were up 3.3% and 2.6%, respectively, and Fortescue Metals Group was 4.7% stronger.

Australia & New Zealand Banking led the major banks, gaining 0.9%. National Australia Bank was 0.8% higher, Westpac Banking was up 0.8% and Commonwealth Bank of Australia rose 0.6%.

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

(END) Dow Jones Newswires

July 26, 2017 03:55 ET (07:55 GMT)