(Adds analysis, quotes, stocks on the move)
SYDNEY, April 9 Australian shares climbed to
5-1/2 year highs on Wednesday morning as department store
operator David Jones rocketed on a $2 billion takeover
bid, triggering a buying frenzy in the retail sector.
A rebound on Wall Street overnight had already given the
market the early impetus, and an uptick in gold prices drove
bullion miners up.
The spotlight was on David Jones Ltd, which went on
trading halt on news it had agreed to a takeover offer from
Woolworths Holdings that valued the company at around A$2.15
billion ($2 billion). The shares had soared 25 percent to the
takeover bid price of A$4.00, and was up 22.9 percent at A$3.92
at the time of the trading halt.
The corporate activity stirred the retail sector. Rival
department store operator Myer Holdings Ltd jumped 5.7
percent, and Harvey Norman Ltd climbed 4.1 percent. JB
Hi-Fi Ltd gained 2.8 percent.
"They are very, very heavily shorted," said Shawn Hickman,
managing director at Market Matters in Sydney, referring to the
retail stocks. He said the takeover bid for David Jones is
acting as a catalyst for a strong rally in the sector.
The S&P/ASX 200 index added 55 points to 5,465.6 by
0206 GMT, surpassing the March 10 peak of 5,462.3. The benchmark
has recovered from a low of 5,288.5 touched on March 20 as China
took modest steps to stimulate a slowing economy, and as
investors piled into cheaper stocks.
Improved consumer confidence data on Wednesday further
The 'Big Four' banks recouped some of their recent losses.
Westpac Banking Corp added 1 percent, while
Commonwealth Bank of Australia was up 0.8 percent.
Miners also posted modest gains as Shanghai steel rebar
futures hit one-month peaks amid optimism Chinese demand will
remain firm after a sustained drop in stockpiles since the start
of March. BHP Billiton Ltd rose 1 percent, and Lynas
Corp Ltd bounced 3.6 percent. Among gold, Beadell
Resources Ltd jumped 5.1 percent as bullion rose 1
Dart Energy Ltd advanced 4.8 percent. The company
said it has completed the sale of its entire interests in
Xiushan shale gas project to an existing partner for a nominal
Worley Parsons Ltd soared 6.3 percent after the
engineering group announced a restructuring of its business
lines to boost margins from next financial year.
New Zealand's benchmark NZX 50 index added 0.6
percent to 5,061.4.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)