Australia shares gain on emerging markets relief, bargain hunting
(Adds market events, share moves, analyst comments) SYDNEY, Jan 29 (Reuters) - Australian shares rose 0.7 percent on Wednesday, recovering slightly from a six-week low, as investors found some relief from a rate hike by Turkey's central bank and picked up stocks that had been sold off in the previous session. The news of Turkey's rate increase stirred hopes that the move would short-circuit a vicious cycle of selling in emerging markets and revive risk appetite in the developed world. A recovery in resources stocks, which tumbled the previous day, helped edge the Australian market into positive territory. Iron ore producer Fortescue Metals Group Ltd gained 2.8 percent and Rio Tinto Ltd added 1.8 percent. Atlas Iron Ltd jumped 6.8 percent after the company raised its full-year iron ore production guidance after a record second quarter. The S&P/ASX 200 index was up 32.6 points at 5,207.7 by 0106 GMT, after four sessions of losses. The benchmark fell 1.3 percent on Tuesday. Wall Street bounced back overnight after an upbeat result from pharmaceutical giant Pfizer Inc, snapping the Dow's five-day losing streak. "There is some relief that comes with positive trading in the U.S. and Europe," said Scott Schuberg, CEO at Rivkin Securities. "The theory that traders still assume the Federal Reserve will continue to step in if it witnesses market shocks wasn't the only thing that helped market last night," Schuberg said, adding that India and Turkey's rate hikes also buoyed sentiment. Wednesday will bring the conclusion of the Fed's two-day policy meeting, with investors anxious to hear whether the Fed will cut another $10 billion from its monthly bond-buying programme, which it began tapering in December. Analysts also said investors were a bit cautious ahead of the corporate earnings season. "At the moment the market is still pricing in 13 percent earnings growth and it's the first time in three years that we've seen earnings growth in the market so that's a positive," said Julia Lee, an equities analyst at Bell Direct. "The February earnings season will give us a better idea of where earnings are headed for the full year." Shares in insurance companies also helped underpin the market with QBE Insurance Group Ltd climbing 2.2 percent and Suncorp Group Ltd rising 1.2 percent. Drillsearch Energy Ltd jumped 6.4 percent to a one-year high of A$1.52 after the company raised its production guidance. Forge Group Ltd tumbled 10.6 percent after the engineering firm said it expects a 2014 full-year loss due to cost pressures and challenging domestic market conditions. New Zealand's benchmark NZX 50 index edged 0.5 percent higher to 4,871.5. (Reporting by Maggie Lu Yueyang and Thuy Ong; Editing by Chris Gallagher)
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