Renewable Energy

Australian shares end at best in over 11 years as U.S.-China resuming trade talks

Credit: REUTERS/DAVID GRAY

Australian shares ended at their best since the global financial crisis on Wednesday, as investors took heart from the United States and China rekindling trade talks, expectations for lower U.S. interest rates, and the European Central Bank's surprise dovish tilt.

Mining, energy units gains most on ASX

Grocer Coles extends gains to end at record high on cost cut plan

NZ closes at all-time best

Focus on U.S Fed rate decision

Updates to close

June 19 (Reuters) - Australian shares ended at their best since the global financial crisis on Wednesday, as investors took heart from the United States and China rekindling trade talks, expectations for lower U.S. interest rates, and the European Central Bank's surprise dovish tilt.

Australian resource stocks gained the most from U.S. President Donald Trump saying officials from both sides would prepare for his meeting with China's President Xi Jinping during a G20 summit in Japan next week.

The S&P/ASX 200 index .AXJO climbed 1.2% to 6,648.1, its highest since December 2007. It had risen 0.6% on Tuesday when Australia's central bank had pointed to further policy easing in the future.

Australian Prime Minister Scott Morrison will need to secure just three votes in the country's upper house to pass legislation, with focus on his major re-election policy of A$158 billion in tax cuts for middle-income earners.

China is the biggest buyer of Australia's resource exports, so metals and mining stocks .AXMM were the biggest gainers on the day, having added 1.6% to a near 8-year best.

Mining behemoth BHP Group BHP.AX rose 1.9%.

Energy stocks .AXEJ also advanced, with Woodside Petroleum WPL.AX and Santos STO.AX both gaining over 2%.

The U.S. Federal Reserve's policymakers wrap up a two day meeting later in the global day. While few analysts expect a rate cut this time, chances of one later, maybe as early as next month, appear high, and investors are waiting to see how dovish the committee's statement sounds.

Helping the general improvement in risk sentiment, European Central Bank Governor Mario Draghi said on Tuesday the ECB would ease policy again if inflation failed to accelerate. Draghi's surprising turnaround on easing sparked speculation of a worldwide wave of central bank stimulus.

Financial stocks sub-index .AXFJ, rallied over 1% to its best level in nine months. The country's "Big Four" banks gained between 0.4% to 1.4%.

In other sectors, Coles Group COL.AX extended gains to close at a record high after the firm unveiled a A$1 billion cost cutting plan on Tuesday.

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 1.1% to 10,304.83, an all-time best.

Fisher & Paykel Healthcare Corporation FPH.NZ was the top gainer, having notched 3.2% higher.

(Reporting by Devika Syamnath in Bengaluru; Editing by Simon Cameron-Moore)

((Devika.Syamnath@thomsonreuters.com; +91 80 6749 1130; Reuters Messaging: Devika.Syamnath.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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