December 5, 2019 / 6:08 AM / 2 months ago

Australia shares close higher on Trump's remarks on trade talks; NZ up

* Financial sector sees best session in 7 weeks

* Bank stocks rise despite RBNZ’s tougher capital requirements

* Caltex Australia remains below Couche-Tard offer price (Updates to close)

By Nikhil Subba

Dec 5 (Reuters) - Australian shares ended higher on Thursday, recovering from a one-month low hit in the previous session, after comments from U.S. President Donald Trump revived optimism about trade talks between Washington and Beijing.

The S&P/ASX 200 index firmed 1.2% to 6,683.00 at the close of trade. The benchmark fell 1.6% to its lowest in a month on Wednesday.

Trump on Wednesday said that discussions with Beijing were going “very well,” which eased concerns of investors who were jittery after his remarks on Tuesday that a trade deal might have to wait until after the 2020 U.S. presidential election.

Trump’s remarks on Tuesday, which raised the prospect of a longer trade dispute between Washington and Beijing, had hurt stock markets around the world.

“The on/off noise we continue to hear on this subject is unlikely to disappear anytime soon and is set to continue dictating broader market sentiment,” analysts at ING said in a note.

Most major component sub-indexes on the Australian benchmark advanced, following a negative end on Wednesday.

The financial sector closed 1.4% higher, its best session since Oct. 16, buoyed by the ‘big four’ banks. Shares of Australia and New Zealand Banking Group, which were on a trading halt for most of the day, ended 2.1% higher.

The stocks rose despite New Zealand central bank announcing an increase to capital ratio requirements for banks, a move that is expected to hurt the bottom line of top Australian lenders who dominate the domestic market there.

In the mining space, diversified players and index heavyweights BHP Group and Rio Tinto Ltd closed 1.6% and 0.8% higher, respectively, helping the sector index rise about 1% at close.

Oil and gas heavyweight Santos climbed 4.2% at close, its best day since Oct. 14, while Woodside Petroleum advanced nearly 2%, marking its biggest daily percentage gain since Oct. 24. The duo helped the energy sub-index finish 1.6% higher.

Petrol pump and convenience store operator Caltex Australia , which recently snubbed a A$34.50 per share takeover bid from Canada’s Alimentation Couche-Tard, ended flat, with shares remaining under offer price for its third straight day.

Meanwhile, New Zealand’s benchmark S&P/NZX 50 index also advanced 0.4% or 47.92 points to finish at 11,257.79.

TV broadcaster Sky Network Television ended 2.5% higher, while utilities provider Infratil strengthened 2.2% at close, hitting its highest since Nov. 6. (Reporting by Nikhil Subba in Bengaluru; editing by Uttaresh.V)

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