Australia shares hit 19-mth high; eye 5,000 level | business | Hindustan Times
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Australia shares hit 19-mth high; eye 5,000 level

Australian shares rose 0.9 per cent to a 19-month high on Wednesday, after US bellwether Intel posted better-than-expected earnings, boosting hopes for US profits, and local banking stocks rallied.

business Updated: Apr 14, 2010 14:08 IST

Australian shares rose 0.9 per cent to a 19-month high on Wednesday, after US bellwether Intel posted better-than-expected earnings, boosting hopes for US profits, and local banking stocks rallied.

"The sentiment for the US reporting period is a little more bullish. There will be a nice little lift there, not to say there are boom times again," said Reynolds & Co director Grant Williams.

He added that the benchmark index was likely to clear the psychological 5,000 level, before an eventual consolidation. "There seems to be a lack of selling pressure around at the moment. It looks like it will grind higher before it has a pullback," Williams said.

The benchmark S&P/ASX 200 index rose 43.1 points to 4,994.7, the highest closing level since Sept 22 2008. The index lost 0.7 per cent on Tuesday.

New Zealand's benchmark NZX 50 index ended up 0.8 per cent to 3,335.5.

Financial stocks led the gains as investors anticipate a solid bank reporting season starting later this month, as well as earnings from US financial giant JP Morgan due on Wednesday.

Among the banks, Commonwealth Bank rose 2.0 per cent to A$59.22 and Westpac Banking was up 1.6 per cent to A$28.20.

Macquarie Group Ltd shares gained 0.8 per cent to A$50.40 after it agreed to buy an aircraft operating lease portfolio from a unit of American International Group, including 47 aircraft for $1.67 billion.

Consumer sentiment data on Wednesday showed confidence was holding up near recent highs despite successive interest rate hikes, but this was not translating into spending plans.

Discretionary retailers were firmer, with department store chain David Jones up 2.4 per cent at A$4.68 and electronics retailer JB Hi-Fi up 0.7 per cent to A$19.34.

Shares in Wesfarmers Ltd rose 1.3 per cent to A$32.70 after the conglomerate said it has agreed to new quarterly coal price contracts, including a 70 per cent increase for most of its Curragh coking coal.

Brokers have been upgrading their earnings estimates for Wesfarmers in recent days, based on expectations of higher coal price contracts.

Shares in MEO Australia Ltd surged 24.7 per cent to A$0.455 after it said it signed an LNG exploration agreement with a unit of Brazilian state oil company Petrobras, in what it said was Petrobas' first entry into Australia.