January 29, 2020 / 6:21 AM / a month ago

Australian shares inch higher on financials, tech; NZ slips

* Big Four banks help financial sector close up 1%

* Gold stocks temper broader gains on benchmark

* Treasury Wine logs worst ever session on trimmed forecast (Updates to close)

By Nikhil Subba

Jan 29 (Reuters) - Australian shares edged higher on Wednesday helped by financial and technology stocks amid cautious trading, even as investors kept a wary eye on the fast-spreading coronavirus.

The S&P/ASX 200 index rose 0.5% to close at 7,031.50, following a 1.4% fall on Tuesday.

Markets across the world stabilized as the head of the World Health Organization and China President Xi Jinping expressed confidence in the country’s ability to stem the virus outbreak.

“Markets pulled back from escalating risk aversion overnight as numbers on the death toll and infections from Coronavirus steadied,” analysts at Mizuho wrote in a note.

However, rising infection and casualty count over the next few days and weeks will strain some of the relief moves witnessed, the note said.

China’s death toll from the virus has risen to 132 with nearly 1,500 new cases, heaping pressure on Beijing to control the disease, which has curbed travel and prompted businesses to close operations.

Australian financial stocks finished 1% higher, propped up by the Big Four banks, as an immediate rate cut by the central bank appeared less likely, following quarterly inflation data.

Australian inflation ticked 0.7% higher in the final quarter of 2019, higher than forecasts of a 0.6% increase.

“We don’t think the RBA will respond to this until trimmed mean inflation starts to pick up considerably ... this cements our view that a RBA move next week is materially less than a 50% probability,” ANZ analysts said in a note.

Technology stocks advanced 1.7%, tracking its U.S. peers to rebound from its worst day in 3 weeks in the previous session.

Industry behemoth WiseTech Global Ltd ended up 3.5%, while software maker Iress Ltd finished 3.4% higher.

Drugmaker CSL Ltd firmed more than 1%, helping the healthcare industry close up 1.1%.

However, gains for Australian shares were tempered by a 2.1% drop in gold stocks, as bullion prices were little changed after falling 1% in the previous session.

Treasury Wine Estates Ltd recorded its worst ever intraday drop after trimming earnings expectations for fiscal 2020 and 2021, citing increased U.S. competition.

Meanwhile, New Zealand’s benchmark S&P/NZX 50 index slipped 0.07% to close at 11,676.51.

Air New Zealand Ltd and adventure goods retailer Kathmandu Holdings Ltd each fell about 2%. (Reporting by Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta)

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