* Reports suggest banks to buy $175 bln in new govt debt
* Data shows business conditions and employment weakens
* NAB, CBA clock biggest gains in two weeks
Sept 8 (Reuters) - Australian shares settled higher on
Tuesday as sentiment was boosted by a report that banks would be
required to take up more debt from the government to aid
stimulus measures to combat the economic damage from the
The S&P/ASX 200 index rose 1.1% to 6,007.8 at the
close of trade, with U.S. S&P 500 futures up 0.5%.
Investors are probably looking forward to a possible rebound
in U.S. stocks after a sell-off last week, said Henry Jennings,
analyst at Marcustoday.
Australian banks will be required to buy up to A$240
billion ($175 billion) of new government debt to boost emergency
liquidity levels, which will also cut government borrowing costs
and help fund coronavirus stimulus spending, the Australian
Financial Review reported on Tuesday.
"If the RBA is saying get out there and lend and get the
economy moving, that's clearly a good sign for the banks - that
the RBA has got their backs and is going to allow them to have
some flexibility with capital requirements and balance sheets,"
The country's "Big Four" banks Commonwealth Bank of
Australia, National Australia Bank, Australia
and New Zealand Banking Group and Westpac Banking Corp
- rose between 1.3% and 1.7%.
Markets shrugged off data that showed soft August business
conditions data due to the Victoria lockdowns and weak
employment figures over the month to Aug. 22.
Healthcare stocks finished 1.5% higher, with gains
led by biotech company CSL, up 2.1%.
Industry heavyweights Woodside Petroleum and Santos
gained 1.% and 1.8%, respectively, and led gains on the
New Zealand's benchmark S&P/NZX 50 index rose 0.3%
to finish the session at 11,895.63, with financial companies
rising the most.
($1 = 1.3742 Australian dollars)
(Reporting by Arpit Nayak in Bengaluru; Editing by Amy Caren