Australia shares extend gains on upbeat bank stocks, NZ slips

By Hanna Paul

July 20 (Reuters) – Australian shares extended their rally
on Thursday, led by robust bank stocks as positive sentiment
spilled over from another record day on Wall Street.

The S&P/ASX 200 index was up 33.07 points, or 0.6
percent, to 5,765.2 by 0211 GMT. The benchmark rose 0.8 percent
on Wednesday.

Financial stocks were on a tear, accounting for over three
quarters of the rise in the benchmark. The ‘Big Four’ banks
dominated, advancing by about 0.9 to 2.7 percent.

The Australian Prudential Regulation Authority (APRA) said
on Wednesday that banks would be required to raise common equity
Tier 1 ratio, a key gauge of a lender’s strength, to at least
10.5 percent by January 2020.

“The APRA’s capital requirements for banks weren’t as high
as people thought and we also had a positive lead from Wall
Street overnight,” said Christopher Conway, head of research and
trading at the Australian Stock Report.

“I think this is one of those days where we end up 50 or 60
points higher as there are more drivers in the market at the
moment. The positive sentiment around banks will probably dry up
and there’s not going to be another big push,” Conway said.

Oil and gas majors Santos Ltd and Woodside
Petroleum led upbeat energy stocks.

Santos jumped about 8 percent at one point, its highest
intra-day leap in 33 weeks, after it reported a 30 percent rise
in sales revenue for the quarter, while Woodside rose a little
over 1 percent despite posting a drop in quarterly output.

Oil prices climbed nearly 2 percent overnight to a six-week
peak on a surprising drop in distillate inventories.

On Wall Street, the three major U.S. indexes hit record
highs as technology stocks surpassed the dot-com era record.

Bucking the trend, diversified miner South32 edged
2.5 percent lower, as the biggest drag on the bourse. The miner
reported a slump in quarterly coking coal production.

New Zealand’s benchmark S&P/NZX 50 index fell 32.64
points, or 0.4 percent, to 5,765 at 0211 GMT.

The bourse was pulled into the red by material stocks, led
by Fletcher Building. Its shares fell as much as 8.8
percent to its lowest in over a year after it said chief
executive Mark Adamson was stepping down and it was cutting its
earnings guidance for the second time in four months.
(Reporting by Hanna Paul; Additional Reporting by Urvashi
Goenka; Editing by Kim Coghill)