Oil-Price Jump Helps Drive Australia Stocks to Four-Week High
September 29 2016 - 2:08AM
Dow Jones News
By Robb M. Stewart
MELBOURNE--A surge in oil prices buoyed Australian energy shares
and encouraged broad buying that lifted the local equities market
to a four-week high Thursday.
Crude-oil prices surged 5.3% in New York trade, the biggest gain
in more than five months, after the Organization of the Petroleum
Exporting Countries signaled it could agree to limit production in
November.
Ending near its highs of the day, the S&P/ASX 200 advanced
58.9 points, or 1.1%, to 5471.3--its highest closing level since
August 30.
The energy sector surged 6.3%, while the basket of materials
stocks picked up 2.8%. Only the property trusts and healthcare
sectors lost ground.
OPEC members reached an understanding at a meeting Wednesday in
Algeria that there was a need to scale back production. They agreed
on a preliminary outline to cut collective output to between 32.5
million and 33 million barrels a day, down from 33.2 million
barrels daily in August, national oil ministers said. The cartel
hasn't approved a cut in production since 2008.
The possible breakthrough deal on curbing the global supply glut
came after months of false starts, although there were signs of
caution among traders as oil prices gave up early gains by midday
in Asia.
Oil-and-gas producers Woodside Petroleum Ltd., Oil Search Ltd.,
Santos Ltd. and Origin Energy Ltd. each rallied by 7% or more.
Smaller producer Beach Energy Ltd. jumped 10%.
Mining and energy company BHP Billiton Ltd. climbed 4.7%. Among
other miners, Rio Tinto Ltd. added 3.7%, South32 Ltd. gained 2.5%
and iron-ore producer Fortescue Metals Group Ltd. was 3.5%
higher.
The major banks also strengthened, with Commonwealth Bank of
Australia 0.8% stronger. Australia & New Zealand Banking Group
Ltd. rose 0.7% and National Australia Bank Ltd. added 0.5%, but
Westpac Banking Corp. was unchanged.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
September 29, 2016 02:53 ET (06:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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