November 28, 2019 / 2:06 AM / 12 days ago

Trade optimism lifts Australia, NZ shares to record highs

* Thin volumes ahead of Thanksgiving holiday

* Healthcare and tech stocks hit all-time highs

* Westpac provides share purchase withdrawal option

By Shreya Mariam Job

Nov 28 (Reuters) - Australian and New Zealand shares hit an all-time high on Thursday as investors cheered prospects of an initial trade deal between Washington and Beijing, while strong data from the United States assuaged concerns of an economic slowdown.

However, volumes held well below the 30-day average in the first two hours of trade ahead of the Thanksgiving holiday in the United States, with the holding pattern expected to continue into the next session.

The S&P/ASX 200 index was up 0.4% or 26.4 points at 6,877.00, as of 0057 GMT. The benchmark closed 0.9% firmer on Wednesday.

The United States and China are close to an agreement on the first phase of a trade deal, U.S. President Donald Trump had said on Tuesday raising hopes for a de-escalation in the prolonged trade war.

“If there is a trade deal, the currencies and stocks of countries that are linked to the Chinese economy will recover so for a global investor that will be a double positive,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

Adding to the positive sentiment, a second estimate of third-quarter GDP for the United States showed that U.S. economic growth had picked up slightly rather than slowing as initially reported.

Meanwhile, a drop in treasury yield has also assisted Australian equities with yields on the cash 10-year bond dropping to 1%, as at 0001 GMT, far from the November peak of 1.34%.

This drop has propped up high-growth stocks including healthcare and tech shares, sub-indices of which are also at record highs.

Biotherapeutics firm CSL Ltd logged a 1.2% gain, while shares of Cochlear Ltd rose 0.6%.

Tracking an overnight rally at Wall Street, Australian tech shares that generally take cues from Western stock markets posted a 0.7% gain, with Afterpay Touch Group and Wisetech Global advancing 1.6% and 1.3%, respectively.

Gold stocks, however, edged lower as bullion prices dropped with investors being cautiously optimistic about a resolution to U.S.-China trade tensions. Shares of Evolution Mining dropped as much as 2.9% and posted their worst session in near three weeks.

Financial stocks were little changed, but most of the ‘Big Four’ banks traded in the red.

Shares of Westpac Banking Corp were flat after the country’s oldest lender said it would let investors withdraw their share purchase applications filed prior to the money laundering allegations made by financial crime watchdog AUSTRAC, amid an investigation into Westpac’s share sale.

Australia and New Zealand Banking Group also shed 0.3%.

New Zealand’s benchmark S&P/NZX 50 index rose 1.1% or 125.30 points to 11,246.11.

Fisher & Paykel Healthcare Corp gained 3%, while A2 Milk Company advanced 2.6%.

Reporting by Shreya Mariam Job in Bengaluru, Editing by Sherry Jacob-Phillips

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