(Adds stocks movement, analyst comments)
* S&P/ASX200 posts biggest percentage gain in 8 days
* Banks, miners advance on short-covering
* U.S. data, China liquidity assurances aid sentiment
* Uncertainty over slowing China growth, Australia's
SYDNEY, June 26 Australian shares snapped a
four-day losing streak and rose 1.6 percent on Wednesday, after
Wall Street rallied on improved investment and housing data and
China's central bank moved to calm fears over a potential
But underlying concerns over slower growth in China and
political uncertainty in Canberra continued to hold Australian
investors back, pulling the index off an intra-day high.
The S&P/ASX 200 index added 75.7 points to 4,731.7,
the biggest one-day percentage gain in eight days. The index,
which rose to an intraday high of 4,749.7 Wednesday, fell 0.3
percent on Tuesday.
"There is certainly a lot of nervousness and uncertainty in
our market, you can see that from reaction in recent days to
what happened in overseas markets," said Greg Fraser, head of
research at Kimber Capital in Sydney.
Australian stocks have been hit hard in recent sessions by
concerns about the U.S. Federal Reserve's plan to cut back on
its massive stimulus, with a cash crunch in China adding to
The People's Bank of China (PBOC) said late on Tuesday it
had helped some banks and was ready to act again as the lender
of last resort for those caught in a short-term
Australian stocks took comfort from the PBOC's move, with
both banks and miners bouncing back on short-covering, said
James McGlew, executive director of corporate stockbroking at
Argonaut in Perth.
Global miners BHP Billiton Ltd and Rio Tinto Ltd
jumped 2.6 percent and 3.3 percent respectively after
commodities prices recovered on easing fears about China's
Banks also joined the rally, with top lender Commonwealth
Bank of Australia rising 1.8 percent.
The country's biggest phone company Telstra Corp Ltd
jumped 2.9 percent.
Some analysts said that there is still underlying concerns
over the surge in volatility in Chinese interbank lending rates.
While China's central bank pledged to prevent any lasting
credit crunch, mainland stocks kept slipping as investors braced
for tougher conditions in the world's second-largest economy.
"I don't think anybody is thinking this is a spring break
for us, it's still tough out there," said Argonaut's McGlew.
Foreign funds had been selling off Australian stocks as they
pulled out of emerging markets, McGlew added.
"We are obviously leading into an election which will
hopefully at least give us some direction there," he said.
Political uncertainty heightened on Wednesday as Australian
Prime Minister Julia Gillard called for a caucus vote on her
leadership later in the day, with supporters of former leader
Kevin Rudd trying to oust her ahead of the scheduled September
Linc energy soared 11.7 percent to A$0.91, after it
reiterated to the stock exchange on Tuesday that it planned to
restructure its coal division to focus on its oil and gas
production assets and could work with partners.
Discovery Metals Ltd plunged 18.8 percent to a
3-1/2 year low, as the Botswana-focused copper miner was still
in the process of finding a buyer after its former suitor
scrapped the bid.
New Zealand's benchmark NZX 50 index jumped 1.8
percent to 4,393.6.
(Reporting by Maggie Lu Yueyang; Editing by Shri Navaratnam)