Australia Stocks Fail to Hold Early Push, End Modestly Higher
MELBOURNE, Australia--Australian shares rose for a second day running, edging higher Thursday as gains in healthcare and consumer staples companies offset pockets of weakness across the market.
Failing to hang on to most of the morning's gains, the S&P/ASX 200 settled up just 2.9 points at 5878.3. It had been up by as much as 0.8%.
The major banks, which carry a heavy weighting in the market, were mixed for the session as investors continue to weigh the federal government's plans for a levy on the biggest banks' liabilities to raise money to plug its budget deficit.
Bank representatives met Thursday with Treasury officials to discuss the levy, but the industry's lobby group afterward said there remained questions about the government's projections and how the tax would be applied.
Mining stocks also dragged on the market after a fresh decline in Chinese iron-ore futures, and energy shares struggled to make ground as crude futures eked out gains in Asian trading.
Commonwealth Bank of Australia and National Australia Bank rose 0.4% and 0.3%, respectively, but Westpac Banking slipped 0.1% and Australia & New Zealand Banking lost 0.3%. Analysts have estimated the major banks' earnings could be cut by up to 6% by the introduction of the new levy, unless they can mitigate that with cost cutting or increases to home-loan rates.
BHP Billiton added 0.4% but Rio Tinto fell 0.7% and Fortescue Metals Group dropped 5.1%. The three are among the world's largest producers of iron ore.
Among energy stocks, Woodside Petroleum was up 0.2% but Oil Search lost 1.2% and Santos declined 0.3%.
For the day, 2.49 billion shares were traded worth 6.77 billion Australian dollars (US$4.99 billion), Commonwealth Securities said.
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(END) Dow Jones Newswires
May 11, 2017 03:24 ET (07:24 GMT)