Australia shares rise on hopes of smoother global trade; NZ up
(Adds dropped word to headline, no text change)
* Materials stocks drive gains on Aussie benchmark
* Rubber products maker Ansell falls as much as 10.1 pct on
results, trade outlook
* NZ benchmark up, led by healthcare shares
By Aaron Saldanha
Aug 20 (Reuters) - Australian shares rose on Monday, taking
heart from an impending meeting of American and Chinese
officials over their countries' market-roiling trade duel, but
gains were tempered by outlooks from retailer Woolworths Group
and rubber products maker Ansell.
China and the United States will hold lower-level trade
talks this month, offering hope that they might resolve an
escalating tariff war with reports suggesting the talks in
Washington would take place on Aug. 21 and 22.
"We've had some positive leads from international trading...
in particular, news of an agreement between China and the U.S.
that both sides were looking to put in place by November, turned
sentiment around," said Michael McCarthy, chief strategist at
CMC Markets and Stockbroking.
"The materials sector, not surprising given the news, is one
of the best performers."
China is Australia's biggest market for exports of iron ore
and other minerals.
The S&P/ASX 200 index was little changed at 6,341.9
at 0200 GMT on Monday, but rose after. It recorded a 0.2 percent
gain on Friday.
Shares of Fortescue Metals Group rose as much as
2.4 percent after the miner said it would produce high-quality
ore with a 60 percent iron content in the second half of fiscal
Fortescue has had to contend with lower demand for its
relatively lower iron content ores as key market China undergoes
an environmental clean-up.
Global miner BHP rose as much as 1.4 percent while
rival Rio Tinto Ltd tacked on up to 1.2 percent.
But Woolworths Group lost as much as 3.5 percent to
hit a 2 1/2-month low. While fiscal 2018 profit rose, the
retailer said sales in its Australian food division in the
current fiscal so far had slowed.
Woolworths cited "bag rage" after it stopped providing free
single-use plastic bags as a factor in slowing sales at its
"The pressure we're seeing on margins in particular is of
concern," said CMC's McCarthy.
"Although revenues were up, like-for-like revenue is the
comparison being given, and remembering that Woolworths has sold
a number of operations, the overall outlook for earnings remains
Rubber products maker Ansell Ltd lost as much as
10.1 percent, its biggest intraday loss in more than 2 1/2
years, on weak outlook. The firm expects trade issues to raise
the cost of the goods it imports into the United States from
"We have had revenue down 3.3 percent. Ansell has also been
on a strategic review of its product offering. It was hoped that
the re-jigging would see growth in revenues. Unfortunately that
hasn't been the case," McCarthy added.
New Zealand's benchmark S&P/NZX 50 index rose 0.3
percent or 25.56 points to 9,078.33, helped by export-oriented
health care stocks, which gained from a weak New Zealand dollar.
Medical device maker Fisher & Paykel Healthcare Corp Ltd
firmed up to 1.6 percent to its highest since Aug. 10.
For more individual stocks activity click on
(Reporting by Aaron Saldanha , Additional reporting by Devika
Syamnath in Bengaluru; Editing by Eric Meijer)
First Published: 2018-08-20 05:17:34
Updated 2018-08-20 05:32:51
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