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Miners lift Australian shares to 2-week high on China demand hopes

06/28/2022 | 03:03am

(Updates to close)

* ASX 200 hits highest since June 14

* Miners and energy stocks top gainers

* NZX 50 rises for third straight day

June 28 (Reuters) - Australian shares extended gains on Thursday, as miners rallied on hopes that easing COVID-19 restrictions in Shanghai and several other Chinese cities would boost iron ore demand.

The resources-heavy S&P/ASX 200 closed 0.9% higher at 6,763.60, adding 3.9% in the past four sessions and hitting a two-week high.

However, it has fallen more than 6% so far this month on concerns that aggressive interest rate hikes by central banks to control surging inflation would slow global economic growth.

China's latest pledge to support its economy and gains in crude oil prices after last week's rout helped Australian mining and energy stocks on Tuesday.

Miners jumped 3.3% to mark their best session in more than a month. Sector heavyweights BHP, Rio Tinto and Fortescue Metals rose between 3% and 4.3%.

"Broader markets remain optimistic but cautious," said Mathan Somasundaram, chief executive officer of Deep Data Analytics.

Energy stocks climbed 3.6% in their best day since June 8, with Woodside Energy and Santos up 4.3% and 2.7%, respectively.

"Rising supply-side issues in the energy market are likely to keep prices well supported, even amid concerns of weaker demand," ANZ Research analysts said in a note.

On the downside, financials declined 0.3% in their worst session in more than a week and snapped three straight days of gains. The country's so-called "Big Four" banks fell in a range of 0.2% to 0.9%.

Among individual stocks, seafood supplier Tassal Group surged a record 16.1% after rejecting a sweetened $721 million takeover offer from Canada's Cooke Inc.

Meanwhile, a Reuters poll found analysts expect Australia's retail sales to show a 0.4% expansion for May, lower than recent readings which may prompt the central bank to check its course on future interest rate hikes.

New Zealand's benchmark S&P/NZX 50 ended 0.2% higher at a more than two-week peak of 11,018.62, with dairy firm a2 Milk among the top gainers. (Reporting by Upasana Singh in Bengaluru; Editing by Subhranshu Sahu)

© Reuters 2022
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