Australia shares post 3-week closing highs on banks, iron ore miners

Aug 11 (Reuters) – Australian shares rose to three-week closing highs on Tuesday, helped by gains in heavyweight financials and iron ore miners, while signs of steadying employment and improving business conditions added to investor confidence.

The S&P/ASX 200 index settled 0.5% higher at 6,138.7, its highest close since July 21, in low-volume trading.

Leading the charge, financials rose more than 1%, with the big four banks climbing in a range of 1% to 2.7%.

Among banks there is clearly a little bit of short-covering taking place before Commonwealth Banks results, along with indications that the economy might not be doing as terribly as previously feared, said Henry Jennings, market analyst at Marcus Today Financial.

Lifting investor sentiment, data showed Australian employment was steady through July, while a measure of business conditions also improved as the service sector rebounded.

The state of Victoria, which has been grappling with a fresh wave of coronavirus cases, reported a small rise in new infections, boosting hopes that case numbers are stabilising as a result of the lockdown measures.

Among gainers, shares of some iron ore miners rose as futures on Chinas Dalian Commodity Exchange jumped on falling portside inventories and upbeat demand, with BHP Group and Rio Tinto gaining 0.9% each.

Gold stocks fell over 4% as bullion prices retreated on a stronger dollar.

Newcrest Mining, the countrys largest independent gold miner, lost 2.8%, while Northern Star Resources dropped 5%.

Among individual stocks, building materials giant James Hardie Industries soared 8% on steady first-quarter earnings and forecasting a potential rise in full-year profit.

Biotech firm Mesoblast dropped more than 30% after a U.S. FDA committee questioned the efficacy of one of its leading drug candidates.

New Zealands benchmark S&P/NZX 50 index slipped 0.3% to 11,645.3, dragged by losses in healthcare and consumer stocks. (Reporting by Soumyajit Saha in Bengaluru; Editing by Subhranshu Sahu)