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SYDNEY Jan 9 Australian shares rose 0.4 percent
on Wednesday, breaking a three-day losing streak as top miners
and major banks helped to offset declines in department stores
and some gold miners.
Analysts suspected that global fund managers were increasing
their exposure to Australian equities through equity swap
transactions, noting the market had gone up at the opening bell
for three straight days.
"Each day on open we see a surge. This is typical what's
known as equity swap transaction," said Michael McCarthy, chief
market strategist at CMC Markets.
"What happens is that fund managers say they want exposure
to shares around the globe, part of that will be Australia, and
the investment bankers take the other side and try to hedge that
exposure by buying shares in the market," he said.
Top miners managed to stay in positive territory at the
close, with BHP Billiton Ltd gaining 0.2 percent and
Rio Tinto Ltd adding 0.3 percent, after rounds of
profit taking from a recent rally.
Gold miners sagged though, with Newcrest Mining Ltd
losing 0.8 percent.
Banks helped lift the market, with a 1.0 percent rise in
National Australia Bank and a 0.9 percent gain in
Westpac Banking Corp.
The benchmark S&P/ASX 200 index was up 17.9 points
at 4,708.1, according to the latest data. It fell 0.6 percent to
4,690.25 on Tuesday.
The market stood its ground even as retail sales data showed
a fall of 0.1 percent for November, missing forecasts for a
"It was a bit average," said Tony Russell, senior equities
adviser at RBS Morgans. "This might be a bit of a fundamental
change in how people are doing their shopping."
Supermarket chain Woolworths Ltd climbed 1.5
percent, reflecting a steady growth in groceries.
Myer Holdings fell 2.7 percent as the government
report showed department store sales fell 0.4 percent in
November. A Myer spokesman told Reuters last week the company
was maintaining its forecast for flat Christmas and January
Meanwhile, a measure of online sales from National Australia
Bank jumped 15 percent in November, taking annual growth in
sales to a brisk 27 percent.
Alumina Ltd rallied 4.6 percent after Alcoa Inc
beat expectations on revenue. Alumina holds 40 percent of
Alcoa World Alumina & Chemicals (AWAC), the world's largest
alumina business, while U.S.-based Alcoa owns 60 percent.
Tiger Resources Ltd surged 7.6 percent after it
said a feasibility study at its Kipoi copper project in the
Democratic Republic of Congo confirmed a low-cost, high-margin
project which can be commissioned after 16 months of
Discovery Metals Ltd lost 3.4 percent, after the
Chinese bidder Cathay Fortune Corp said it was concerned that
the actual reserves and grades at the miner's key copper project
in Botswana could be significantly lower than previously stated.
Cathay said it required Discovery to provide the relevant
information no later than Jan. 18.
New Zealand's benchmark NZX 50 index extended gains
by 0.3 percent to close at a fresh 5-year high of 4,103.5.
(Reporting by Maggie Lu Yueyang; Editing by Jacqueline Wong)