Australian shares rise as US, Iran sign peace deal

Australian shares rose slightly on Thursday after the US and Iran released details of their agreement to end the war, while gold stocks limited gains as bullion dropped on prospects of a rate hike by the US Federal Reserve this year.

The S&P/ASX 200 index rose 0.1% to 8,974.50 by 0019 GMT, after briefly hitting its highest level since mid-April.

The benchmark added 0.5% on Wednesday.

The US and Iran released the text of an interim agreement to end their war on Wednesday, although US President Donald Trump threatened to resume attacks and kill Iranian officials if they failed to honour their commitments.

Financials rose 0.5%, supported by banking heavyweights.

Top lender Commonwealth Bank of Australia and Westpac both gained 0.6%. Investment bank Macquarie Group surged as much as 0.5% to a record high.

Meanwhile, shares of fund manager Challenger rose 0.8% after its unit Fidante agreed to a merger with Channel Capital to create an entity with A$150 billion ($105.41 billion) in assets under management.

Investment firm Washington H.

Soul Pattinson gained as much as 1% after divesting some properties of Brickworks’ Industrial Joint Venture Trust to Goodman Group for A$1.89 billion.

Overall gains were limited by gold miners, which dropped as precious metal prices fell overnight while prospects of a rate hike this year from the US Federal Reserve grew after rates were left unchanged. Evolution Mining fell as much as 3.4%, dropping most in a week, while rival Northern Star Resources dropped 2.5%.

Lower iron ore prices weighed on larger miners, with shares of BHP and Rio Tinto dropping 0.4% and 0.9% respectively. That pulled down the mining sub-index, which fell 0.7%.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.2% to 13,363.35.

Data showed the economy rose 0.8% in the first quarter from the prior quarter, which was in line with analysts’ expectations.