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By Soumyajit Saha
May 13 (Reuters) - Australian shares reversed course to close higher on Wednesday, as heavyweight Commonwealth Bank of Australia’s shares rose after news of the sale of its wealth management business and coronavirus provisions being broadly in line with peers.
The S&P/ASX 200 index ended the session 0.35% higher at 5,421.9, after having fallen as much as 2% earlier.
The country’s largest bank booked provisions of A$1.5 billion ($970 million) to cover pandemic-related loan losses and sold a 55% stake in its Colonial First State business for A$1.7 billion.
CBA’s three biggest rivals have already more than quadrupled their bad debt charges to a total of A$5 billion in their first half.
“The market has taken some encouragement out of Commonwealth Bank reporting decent results given the present headwinds,” Henry Jennings, senior analyst at Marcus Today Financial said, adding that the majority stake sale further boosted confidence and looked “a lot like a quasi-capital raise.”
The subindex of financial stocks gained, with CBA rising over 1%.
Jennings also said market sentiment recouped on hopes of a gradual reopening of the local economy and effective management of new virus clusters in the short term.
Data showed on Wednesday a measure of consumer sentiment jumped a record 16.4% in May from April, raising hopes of a relatively quick revival in spending.
Among other sectors, the subindex of mining stocks gained alongside a rise in iron ore prices. Chinese iron ore futures on the Dalian Commodity Exchange rose 1.8%.
Index heavyweight BHP Group advanced 0.9% after brokerage UBS upgraded its stock’s rating.
Gold stocks climbed about 1.2% as the underlying commodity’s prices rose, with the country’s largest independent gold miner Newcrest Mining rising 0.8%.
Gold rose 0.21% to $1,705.00 by 0605 GMT.
Energy stocks fell, hurt by a slump in oil prices on fears of a second wave of the new coronavirus infections.
Industrial engineering co Worley Ltd dropped over 5%, while explorer Woodside Petroleum was 1.6% lower.
Brent crude futures fell 1.5% to $29.53 a barrel while U.S. West Texas Intermediate (WTI) crude lost 0.74% to $25.59 per barrel.
The number of issues on the ASX that advanced were 611 while 925 declined
In New Zealand, the benchmark S&P/NZX 50 index ended 0.2% lower, hurt by losses in the utilities and telecom sectors.
Reporting by Soumyajit Saha in Bengaluru; editing by Uttaresh.V