July 30, 2019 / 2:47 AM / 4 months ago

Australian shares hit record high on mining gains, NZ also at peak

* Mining stocks dominate gains

* Northern Star Resources up on record sales

* Investors eye U.S. Fed meeting

By Aditya Soni

July 30 (Reuters) - Broad-based gains propelled Australian shares to a record high on Tuesday, with higher commodities prices driving investors heavily into the country’s resource sector.

The S&P/ASX 200 index rose as much as 0.7% to a record high of 6,875.50 earlier in the session, though it trimmed these gains to 0.4% by 0210 GMT. The benchmark firmed 0.5% on Monday.

“We have got momentum on our side at the moment, the banking sector is recovering and we are seeing relatively strong commodity prices,” said Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Jennings added that the prospects of a benign earnings season, a potential recovery in the housing market and monetary policy easing were also driving foreign inflows.

The bullish sentiment on Tuesday was underpinned by mining stocks, which posted their biggest intraday gains in more than a week on higher iron ore prices.

Global miners BHP Group and Rio Tinto, which have driven much of the gains on the benchmark this year, rose 0.9% and 0.6%, respectively.

Rio is scheduled to report its first-half results on Thursday, with analysts expecting Australia’s second-largest company to benefit from surging iron ore prices.

Gold miners also advanced, with Northern Star Resources seeing its best day since July 22 after reporting record quarterly sales of the precious metal.

Investors were also driven higher by a widely anticipated U.S. rate cut this week and hopes the Federal Reserve would signal the start of a policy easing cycle.

Healthcare stocks scaled a new peak, with drugmaker CSL climbing 0.6% to its highest since Sept. 4.

Financials ticked up to a near one-and-a-half year high. A U.S. rate cut would lower funding costs for Australian lenders.

Shares of Westpac Banking Corp, the country’s second biggest bank by market value, rose 0.5% to a near one-year high.

Markets will also pay attention to U.S.-China trade talks due to begin in Shanghai on Tuesday. Although expectations for a breakthrough in talks are low, investors are hoping that two sides could agree to some “goodwill” gestures.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index firmed 0.4% or 48.15 points to 10,899.51. The benchmark had touched a record high of 10,903.010 earlier in the session.

Gains were dominated by local listing of Westpac Banking Corp which rose 0.8%.

Reporting by Aditya Soni in Bengaluru; Additional reporting by Devika Syamnath; Editing by Sam Holmes

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