September 28, 2018 / 2:17 AM / 2 months ago

Australia shares brace for financial inquiry report; NZ up

* Materials stocks dominate gains in Australia

* Energy stocks rise on higher oil prices

* Financials nervy before inquiry report

By Aditya Soni

Sept 28 (Reuters) - Australia’s benchmark share index rose to a more than three-week high on Friday, with materials leading broad-based gains, but financial stocks were on edge ahead of the release of a high-profile inquiry’s interim report later in the day.

The S&P/ASX 200 index rose 0.6 percent or 34.70 points to 6,215.90 by 0200 GMT. The benchmark fell 0.2 percent on Thursday but was on track to post a gain of 0.4 percent for the quarter.

“The markets are having the usual optimism into the close of a quarter,” said Mathan Somasundaram, market portfolio strategist with Blue Ocean Equities.

James McGlew, executive director of corporate stockbroking said that window dressing was supporting the gains and the biggest stocks are all going to finish marginally higher as ASX has had a good quarter given the volatility that’s coming from overseas.

Materials accounted for nearly half of the gains on the benchmark, with the metals and mining index rising 1.1 percent to a near two-month high.

Global miner BHP rose 1.3 percent to its highest since August 1, while its rival Rio Tinto Ltd firmed 0.4 percent.

Freeport McMoRan Inc and Rio Tinto have struck a binding accord to sell a majority stake in the world’s second-biggest copper mine, Grasberg, to Indonesia’s state mining company, Inalum for $3.85 billion.

Energy stocks rose as much as 1.4 percent supported by a rise in oil prices.

Oil edged higher on Thursday, driven by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in five weeks.

Benchmark heavyweight Woodside Petroleum Ltd firmed 0.8 percent to a near four-year high, while Origin Energy Ltd climbed 1.7 percent to its highest since Sept. 17.

Banks and insurers were under the cosh ahead of the release of the inquiry’s interim report. The Royal Commission has already revealed widespread wrongdoing in Australian financial services, making it the worst-performing ASX sector this year.

The financial index was 0.1 percent lower, on track for fifth straight day of losses.

No.2 lender Westpac Banking Corp dropped 1 percent to a more than three-month low and was the biggest drag on the benchmark, while National Australia Bank Ltd ticked down 0.2 percent.

Westpac said on Thursday after the market close that its annual cash earnings will fall by about A$235 million ($169.41 million) on account of provisions for customer refunds and litigation.

Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index ticked up 0.3 percent or 23.87 points to 9,310.27.

Health care stocks dominated the gains, with Fisher & Paykel Healthcare Corporation Ltd rising 1.7 percent. ($1 = 1.3872 Australian dollars) (Reporting by Aditya Soni in Bengaluru; Additional reporting by Shanima A; Editing by Kim Coghill)

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