January 5, 2018 / 1:13 AM / a year ago

CORRECTED-Australia shares hit 10-yr top on global rally; NZ retreats

(Corrects third graf to say sixth week instead of session)

By Chris Thomas

Jan 5 (Reuters) - Australian shares hit a fresh 10-year high on Friday and were set to finish the first week of 2018 in the black, as financials and mining stocks rallied on strong global cues and firm oil prices.

The S&P/ASX 200 index rose as much as 0.6 percent to 6,114.4, its highest since January 2008, after closing marginally higher in the previous session.

The index is on track to finish firmer for its sixth week in seven.

Major stock indexes around the world hit record highs on Thursday, boosted by solid data from the world’s largest economies, with the Dow industrials breaking above the 25,000 level for the first time.

“While a little cautious about reading too much into movements over late-December and early-January, the background leading into the period from an economic perspective looks pretty solid,” said Damien Hennessy, co-founder of Heuristic Investment Systems.

Banking stocks accounted for most of the gains on the Australian benchmark index, with Commonwealth Bank of Australia advancing 1 percent to its highest in more than three weeks.

Other “Big Four” banks rose between 0.6 percent and 1.1 percent.

Miners also enjoyed some gains on the back of robust metal and oil prices. BHP Billiton was among the biggest boosts to the index, climbing 1.2 percent to its highest since May, 2015.

BHP is on track for its ninth straight positive session, and will likely finish the first week of the new year up more than 3 percent.

South32 Ltd posted a 2.5 percent gain, touching its highest in over nine weeks.

“Growth has been hard to come by domestically ... global cyclical exposures have provided some access to growth,” said Hennessy.

Oil rose to its highest since May, 2015, on concerns that unrest in Iran and another decline in U.S. inventories could hit supply.

New Zealand’s benchmark S&P/NZX 50 index drew back from record highs hit in the previous session to fall 0.3 percent, its biggest intraday percentage drop since mid-December.

The index is, however, headed for an eighth straight weekly gain.

Telecom stocks dominated the losses, with Spark New Zealand Ltd slipping 1.6 percent to a four-week trough.

Reporting by Chris Thomas in Bengaluru; editing by Richard Pullin

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