Australia shares inch higher as trade tensions ease
By Devika Syamnath
Aug 7 (Reuters) - Australian shares saw meagre gains on
Wednesday as investors tentatively sampled risk assets after
China's central bank helped stabilise the yuan, easing fears
that its trade war with the United States might run into
The S&P/ASX 200 index was higher by 0.1%, or 7.9
points, at 6,486 by 0210 GMT. It has fallen nearly 5% since last
Thursday when U.S. President Trump threatened further tariffs on
Chinese goods, leading China to allow the yuan to sharply
deflate against the greenback.
Safe-haven gold stocks accounted for most of the
gains on the main index, having climbed as much as 4% on the
back of robust metal prices which continued to rise on the
uncertainty surrounding U.S.-China trade relations.
Commonwealth Bank of Australia, the country's
largest lender, weighed down the benchmark, weakening as much as
2.9% to an over two-month trough after disappointing annual
CBA posted its first back-to-back annual profit decline in
more than a decade and dashed investor hopes for a special
dividend, flagging further pain to margins from low interest
rates and swelling costs.
Fellow "big four" banks ANZ and Westpac
gained as much as 0.8% and 1.5%, respectively.
Insurer Suncorp Group was set for its best session
in nearly a year after it announced a A$506 million ($341.8
million) capital-return and share-consolidation plan.
Big miners such as BHP Group and Rio Tinto
gave up as much as 1.1% and 1.3%. Resource exports, primarily
iron ore, are Australia's single-biggest earner, and China its
"Strong economic growth in China is the primary reason why
Australia has not had a recession in 27 years. However, this
economic miracle may be coming to an end," said Kim Do,
strategic media advisor at IBISWorld Pty Ltd.
In New Zealand, the benchmark S&P/NZX 50 index was
0.1% higher at 10,602 by 0204 GMT.
The country's central bank cut its interest rate by 50 basis
points to 1.00%, in line with global policy easing bias.
Dairy-products maker Fonterra Co-operative Group
said it intends to reduce its stake in China's Beingmate Baby &
Child Food Co, as it was unable to find a buyer for
its entire holding.
($1 = 1.4806 Australian dollars)
(Reporting by Devika Syamnath in Bengaluru; Editing by Stephen
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