November 25, 2019 / 1:17 AM / 11 days ago

Australian shares climb on positive U.S.-China trade comments

* Afterpay surges as audit finds ‘low-risk’ of money laundering

* Nufarm dives 20% on flagging lower HY earnings

* Westpac falls 2.1% to a near 10-month low

By Niyati Shetty

Nov 25 (Reuters) - Australian shares climbed on Monday as positive rhetoric from both the United States and China renewed hopes of an interim trade deal to end their 16-month long tariff dispute.

The S&P/ASX 200 index was up 0.5%, or 35.9 points, to 6,745.70 by 1254 GMT. The benchmark rose 0.6% on Friday.

Market sentiment warmed after U.S. President Donald Trump on Friday said a trade deal was “potentially very close”, reciprocating comments by Chinese President Xi Jinping that Beijing wanted to work out an initial pact.

“Even though it isn’t saying anything concrete, we know how sensitive the market is to good or bad news on that (trade) front,” said Steven Daghlian, market analyst at CommSec, referring to Trump’s comment.

“Positive signs on U.S.-China can be fleeting and can change in the next two hours, but for now the sentiment is looking okay for markets and we are slowly eating away at the falls recorded last week.”

Global miners BHP Group Ltd and Rio Tinto Ltd added 1.8% and 2.1%, respectively, buoying the heavyweight metals and mining sub-index to a more than 2-week high.

Fortescue Metals Group also advanced 2% as China iron ore futures jumped on Friday on signs of strong demand.

The energy index climbed as Caltex Australia Ltd rose about 10% after the firm said it expected better fiscal 2020 earnings from its convenience retail business due to an improvement in fuel margins.

Woodside Petroleum Ltd gained 0.7% and Oil Search Ltd rose 1.1%, as oil prices firmed.

Buy-now-pay-later firm Afterpay Touch Group surged 11.7%, making it the best performer on the ASX benchmark, after an external auditor report found the firm to be a “low-risk business” in terms of its vulnerability to money laundering and terrorism financing.

Financials rose marginally even as No.2 lender Westpac Banking Corp weighed on the sub-index for a fourth straight session, falling as much as 2.1% to a near 10-month low.

Westpac said it would close an international funds transfer platform, days after the financial regulator accused it of breaching anti-money laundering laws, including enabling payments from convicted child sex offenders and “high risk” countries.

Nufarm Ltd slumped nearly 20% as the crop protection firm after flagging tougher trading conditions and ‘significantly lower’ core earnings in the first half of financial year 2020.

New Zealand’s benchmark S&P/NZX 50 index rose 0.2%, or 20.05 points, to 10,966.35.

Utilities firm Mercury NZ Ltd added 1.8%, while Fisher & Paykel Healthcare Corp was up 1.1%. (Reporting by Niyati Shetty in Bengaluru; editing by Jane Wardell)

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