November 6, 2019 / 1:05 AM / 11 days ago

Australian shares edge higher but gold stocks cap gains, NZ falls

* Banks on track for second day of gains

* Gold stocks dip

* Boral falls after flagging weak first half

By Shriya Ramakrishnan

Nov 6 (Reuters) - Australian shares inched higher on Wednesday, helped by the banking and energy sectors, but gains were checked by a fall in gold stocks on renewed Sino-U.S. trade optimism.

The S&P/ASX 200 index rose 0.1% or 3.2 points to 6,700.3 by 0033 GMT. The benchmark ended 0.2% higher on Tuesday.

Financial stocks rose after the central bank left interest rates unchanged on Tuesday. The “Big Four” banks gained between 0.4% and 0.8%.

The Reserve Bank of Australia held interest rates steady as expected at its policy review, as it gauged the impact of three cuts already delivered this year, while leaving the door ajar for further stimulus if needed. “There is a lot of talk that with the official cash rate at 0.75%, there is very little room for banks to cut deposit rates any further....so further interest rate cuts would mean margin compression,” Michael McCarthy, Chief market strategist at CMC Markets said.

The banking sector has come under pressure of late after Australia and New Zealand Banking Group and Westpac Banking Corp reported weaker results due to record low interest rates and tougher competition.

National Australia Bank will report on Thursday, and the country’s top lender Commonwealth Bank of Australia the week after.

Energy stocks were poised for a fourth day of gains, boosted by higher oil prices. Oil refiner and retailer Viva Energy Group led gains in the sector with a 1.5% advance, while heavyweight Oil Search traded 1.3% higher.

Gold stocks fell 2.9%, dented by a fall in prices of the safe-haven metal, as increasing optimism over a U.S.-China trade deal spurred investors’ appetite for riskier assets.

However, a rally in global equity markets took a breather in early Wednesday, after China pressed U.S. President Donald Trump to remove recently imposed tariffs.

The mining sub-index ticked up 0.1%, tracking strength in copper and iron ore prices. BHP Group , the world’s biggest miner added 1.4%, while copper miner OZ Minerals gained 2.6%.

Meanwhile, building materials maker Boral Ltd was among the top drags on the ASX 200, sliiding 3% in its worst day since Aug. 26. The company on Wednesday warned of a weaker fiscal 2020 first half amid project delays and a softer housing market.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.7% or 78.8 points to 10,762.76.

New Zealand stock exchange operator NZX Ltd delayed the opening of markets for almost three hours on Wednesday because of “systems issues” in the derivatives market.

Dairy company a2 Milk slipped 3.7%, while New Zealand Refining Company shed 0.5%.

Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Kim Coghill

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