Financials, tech stocks drive Australian market higher

(Reuters) – Australian shares settled higher on Tuesday for the seventh straight session, as financials jumped on some economic optimism and dividend hopes, and technology stocks tracked Wall Street higher.

FILE PHOTO: Pedestrians are reflected in a window displaying stock prices at the Australian Securities Exchange (ASX) in Sydney, Australia, February 13, 2018. REUTERS/David Gray

The S&P/ASX 200 index .AXJO rose 1% to 6,195.70, adding about 7% during the seven sessions of gains through Tuesday.

Financials .AXFJ closed 1.7% higher, after having hit their highest level since Aug. 12 earlier in the session, with the “Big Four” banks adding between 1.7% and 3.3%.

“There are some signs that there is a bit of optimism for the economy moving forward, and that’s helping banks have a pretty good run,” said James Tao, a market analyst at CommSec.

Last week, the Australian government pledged billions in tax cuts and measures to boost jobs, which was quite accommodative for the economy.

Additionally, eased lending standards for banks have also brightened growth prospects for the economy, which slid into recession for the first time in nearly 30 years due to the COVID-19 pandemic.

“Banks are still tempting for punters who believe dividends will come back,” said Brad Smoling, managing director at Smoling Stockbroking.

Technology stocks .AXIJ tracked a rally in their U.S. peers, particularly in Apple Inc AAPL.O and AMZN.O, and rose 1.6% to a record.

The communication services sector .AXTJ closed 2.4% higher, boosted by Telstra Corp’s TLS.AX more than 4% gain after the telecom company retained its annual dividend.

Limiting gains, the mining sector .AXMM slipped 0.3%, mostly dragged by coal companies following reports that China has stopped taking Australian coal shipments.

West African Resources Ltd WAF.AX was the top loser with a drop of 10.74%, while Ioneer Ltd INR.AX shed 4.88%.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 gained 0.79% to a record close of 12,453.9.

New Zealand-listed shares of Australia and New Zealand Banking Group Ltd ANZ.NZ were the top gainers, up 3.63%.

Reporting by Nikhil Subba in Bengaluru; Editing by Subhranshu Sahu

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