May 16, 2019 / 1:47 AM / 2 months ago

Australia shares inch up on rate cut hopes; NZ at record high

* April jobs report main focus for rate cut hopes

* Unemployment rate ticks up to 5.2% vs 5.1% expectation

* Miners, energy stocks boost benchmark

* NZ hits record high

By Rashmi Ashok

May 16 (Reuters) - Australian shares inched up on Thursday, as weaker than expected local jobs data supported expectations for a central bank rate cut, although broader weakness in regional markets capped gains.

The S&P/ASX 200 index rose 0.40 points or 0.01% to 6,284.60 by 0141 GMT, having risen as much as 0.3% earlier. The benchmark rose 0.7% on Wednesday.

Stocks had rallied in the previous session after data showed wage growth stagnating last quarter, fuelling market expectations that the Reserve Bank of Australia (RBA) would cut interest rates soon.

The RBA pinned its hopes on a robust labour market to lend support for a cooling economy. Markets took signs of labour market weakness as an argument for rate cuts.

The April jobs report showed that unemployment rate crept to 5.2% from 5.0%. It was expected to have ticked up to 5.1%.

“Yesterday’s wages data showed no signs of an uptick outside Victoria so wages are not going to rescue households. And we know the NAB business survey showed a deterioration as well in the labour market,” said Greg McKenna, founder of McKenna Macro, in a note.

“That makes the release of the employment data today super important for the Aussie dollar and for expectations about the RBA”, he added, referring to RBA’s rate decision.

Also offering some support, U.S. Treasury Secretary Steven Mnuchin said he will likely travel to China soon to continue trade talks. Markets were rattled by the sudden worsening of tensions earlier this week.

Energy stocks surged as much as 1.7%, on the back of rising oil prices.

Origin Energy and Santos rose as much as 2.8% and 2.1%, respectively. Woodside Petroleum put on 1.2%.

Miners also rose, boosted by gold stocks. Top gold miner Newcrest Mining rose 1% while Northern Star Resources gained 1.1% .

BHP Group and rival Rio Tinto edged higher in early trade, but slipped slightly thereafter.

Meanwhile, Fortescue Metals Group rose as much as 2.8% after a lacklustre performance in the previous session.

Financial stocks slumped, after Australia’s second-biggest lender Westpac Banking Corp tumbled as much as 4.7% to a one-month low as shares traded ex-dividend.

Westpac’s drop offset modest gains from Commonwealth Bank of Australia and Australia and New Zealand Banking Group .

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 69.02 points or 0.7% to 10,200.60, hitting a record high.

Dairy giant a2 Milk Company rose 1.1%, while Air New Zealand added 0.4%.

Reporting by Rashmi Ashok in Bengaluru; Editing by Sam Holmes

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