Australian shares rose on Monday, as mining stocks tracked gains in iron ore prices after Brazil's Vale SA said it would cut output, although broader gains were capped by a lacklustre performance in the financial sector. Asian stocks also rose, fuelled by mounting speculation that the US Federal Reserve will adopt a dovish stance at its policy meeting this week.
The S&P/ASX 200 index closed 0.25 percent, or 15.3 points, higher at 6,190.5. The benchmark was little changed on Friday. Miners underpinned gains, soaring after iron ore prices rose nearly 3 percent, supported by concerns over tight supply after mining giant Vale SA said it would cut output further.
Mining giants and benchmark heavyweights, BHP Group and Rio Tinto Ltd rose 1.4 percent and 1.7 percent, respectively.
Iron ore miner Fortescue Metals Group Ltd was among the top percentage gainers, jumping 5.4 percent, its highest closing level in over 2 years. Gold miners also advanced, with Newcrest Mining Ltd firming 0.9 percent and St Barbara Ltd putting on 0.7 percent.
Miners have largely advanced in 2019, with stocks such as BHP Group gaining 12.7 percent and Rio Tinto jumping about 23 percent. "The appeal of the Australian financial sector continues to diminish on the back of the recent Royal Commission report, and the relative attractiveness of our resources is seeing cash flow from financials into resource companies," said James McGlew, executive director of corporate stockbroking at Argonaut.
Financial stocks edged lower for a seventh straight session, dragged largely by the country's top lender Commonwealth Bank of Australia and National Australia Bank, which fell 0.7 percent and 0.4 percent, respectively.
So far this year, lender CBA has shed about 0.8 percent while NAB has climbed just 4.7 percent.
The financial sub-index has gained nearly 6 percent this year, against a 15.1 percent rise in the mining sub-index. New Zealand's benchmark S&P/NZX 50 index rose 0.44 percent or 41.85 points to finish the session at 9,515.12, a record high. The benchmark was supported by a rise in stocks such as Mainfreight Ltd and Fletcher Building Ltd.
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