Australian and New Zealand shares bounced higher on Thursday, after encouraging US data boosted risk appetite, while upbeat domestic building approvals further supported the sentiment.
The S&P/ASX 200 index gained 33.2 points or 0.6 per cent to 5,386.9 by 0132 GMT, snapping two sessions of losses, though the benchmark was still down 1 per cent so far this week.
“There is a bit of a relief rally in response to better-than expected data in the United States and Germany,’’ said Michael McCarthy, chief market strategist at CMC Markets.
“We've turned a bit of a sentiment corner and it’s seen across all asset classes,’’ he said.
Building approvals
Some of the reprieve came after Australian approvals to build new homes in November jumped 7.5 per cent, against forecasts for a fall of 3.5 per cent.
The Reserve Bank of Australia has been counting on the housing sector to help the domestic economy cope with a cooling in mining activities.
Also supporting stocks were government bond yields near record lows in much of the developed world, making equity investments attractive. Australia’s 10-year bond yield pays a mere 2.7 per cent.
Mining shares jump
Shares in mining companies rose amid stabilisation in the prices of iron ore. Australia’s top export earner Rio Tinto gained 2 per cent, while BHP Billiton was 0.6 per cent higher.
Financials also pulled the market higher with ANZ Banking Group and National Australia Bank up around 0.6 per cent.
The energy sector lagged with a 0.8 per cent loss.
In New Zealand, the benchmark NZX50 index rose 12.2 points or 0.2 per cent to 5,570.20, as a rise in Air New Zealand to a one-week high drove a rebound from slight losses the previous day.
Air New Zealand surges
Air New Zealand rose 2 per cent to NZ$2.60, closing in on a 7-1/2-year high of NZ$2.64 hit late last month after reports that the national carrier had ordered two new Boeing 787 aircraft raised optimism about its expansion plans into Asia and North and South America.
Specialised milk processor A2 Milk gained 1.8 per cent to N$0.56 following a rise in global dairy prices the previous day that suggested demand for milk products may be recovering following a 50 per cent fall in 2014.
Overall, gains were tempered by a 3 per cent slide in Kathmandu to a two-year low of NZ$1.96 as the struggling outdoor wear brand remained under pressure on concerns that a weak holiday trading season will weigh on earnings.