Aug 7 (Reuters) – Australian shares are set to snap three sessions of falls on Monday, tracking a strong finish on Wall Street the previous session, and as firm commodity prices lifted materials stocks.
The S&P/ASX 200 index was up 54.42 points, or 0.95 percent, to 5,775 by 0251 GMT.
U.S. stocks surged on Friday, with the Dow Jones Industrial Average ending at its eighth straight record high, after data showed employers hired more workers than expected in July.
The strong jobs report is likely to clear the way for the Federal Reserve to announce a plan to start shrinking its $4.2 trillion bond portfolio in September, and could strengthen its case to raise rates for the third time this year in December.
Along with the optimism drawn from gains on Wall Street, a rally in oil, copper and iron ore, and the pressure on gold and gold shares suggest that investor appetites are up for more risk at the moment, said Michael McCarthy, chief market strategist at CMC Markets.
Australian financials regained some of the losses recorded last week and accounted for nearly half the gains on the index, with Westpac Banking Corp, National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd rising in the range of 1.3 percent to 1.6 percent.
Commonwealth Bank of Australia opened at a near eight-week low but recovered to gain as much as 1.5 percent.
Australia’s No.1 lender, which has been stewing amid money-laundering allegations, on Monday said a software “coding error” was responsible for the “vast majority” of the anti-money laundering law breaches it was accused of.
“The market is taking a more balanced view of the risks of CBA today,” said McCarthy. While Friday’s fall has not been reversed, the recovery today suggests that there is less concern about the potential impact of the regulator’s action, he added.
Material stocks were upbeat on the back of strong commodity prices, with mining giants BHP Billiton and Rio Tinto Ltd climbing to five-and-a-half month highs.
Sentiment in the region also got a boost from a survey that revealed Australian job advertisements rose for a fifth straight month in July, suggesting a strong pick-up in employment seen in recent months could run for a while yet.
Crown Resorts Ltd was the biggest decliner on the index, falling 5.6 percent to its lowest in nearly four months after Deutsche Bank cut its price target. The casino operator closed 2.9 percent lower on Friday after reporting a drop in annual profit.
New Zealand’s benchmark index S&P/NZX 50 rose 10.74 points, or 0.1 percent, to 7,756.86 at 0251 GMT, after opening slightly lower.
A2 Milk Company Ltd rose 4.1 percent to a second consecutive record high, and was the biggest boost on the index. The dairy firm, along with Synlait Milk, said on Friday they were confident about their application to the China Food and Drug Administration to export infant formula.
Reporting by Chris Jacob Thomas in Bengaluru; Additional
reporting by Nicole Pinto; Editing by Jacqueline Wong