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hold-Australia shares gain as jobless rate fuels stimulus hopes; NZ up

Thu, 19th Sep 2019 07:49

* "Big Four" banks push benchmark higher

* Aussie jobless rate worsens, reinforces c.bank stimulusexpectations

* NZ qtrly GDP growth beats expectations

By Nikhil Subba

Sept 19 (Reuters) - Australian shares advanced on Thursdayled by financial sector stocks as data showing unemployment atits highest in a year reinforced expectations of more centralbank stimulus.

The S&P/ASX 200 index ended about 0.5% or 32.4points higher at 6,714.50 by 0539 GMT. The benchmark shed 0.2%on Wednesday.

The jobless rate rose to 5.3% in August as more peoplelooked for work.

Analysts at RBC Capital Markets said in a note that the datawas broadly consistent with the Reserve Bank of Australia'sforecasts but would add to "pressure for further rate cuts".

"We expect that a further increase in the unemployment rate5.4% by the end of the year and subdued economic activity willforce the RBA to cut interest rates to 0.5% by early next year",Ben Udy, Australia & New Zealand economist at Capital Economicssaid in a note.

Sentiment in broader markets was cautious, however, after acut in U.S. interest rates was accompanied by mixed signals overthe U.S. Federal Reserve's stance. Fed Chair Jerome Powell saidthe central bank was prepared to be "aggressive" if necessary,but signalled a higher bar to further reductions.

The Australian benchmark was helped by a near 1% gain in thefiniancial sub-index, with the "big four" banks alltrading higher.

Analysts have noted that lower interest rates could help biglenders reduce mortgage debts as it could lower overall cost ofborrowing for home owners.

Energy stocks ended 0.4% lower, wiping out earliergains, with oil and gas heavyweights Santos Ltd and OilSearch both reversing course to close about 0.5% lower.

The mining sector was dragged lower by gold stocks,after bullion prices fell in light of the U.S. Fed's mixedsignals, with gold explorers Silver Lake Resources andSaracen Mineral among the top losers by the close.

Miners were also hit by lower iron ore prices, which weredragged lower by increasing supply in China, while copper pricesslipped as concern about demand and economic growth dominatedsentiment.

New Zealand's benchmark S&P/NZX 50 index finished0.2% or 26.2 points higher at 10,801.05, lifted by energy andhealthcare stocks.

Data on Thursday showed New Zealand's economy grew at aslightly slower pace in April-June from the previous quarter,although growth was faster than analyst expectations.

(Reporting by Nikhil Subba in Bengaluru; Editing by SimonCameron-Moore)

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