Australian shares rose 1.1 percent on Tuesday, ending a three session losing steak as investors snapped up shares in recent declines such as Westfield Group Ltd, while firmer metal prices boosted the top miners.
But shares in Coles Group Ltd fell after private equity firm Kohlberg Kravis Roberts pulled out of a consortium eyeing a bid for the retailer. Analysts say that while the domestic market's upward trend is largely intact over the longer term, with the economy in good shape and liquidity flows likely to remain strong, it could be in for more volatility in the near term. "I think there's a potential for further correction in the short term," said Richard Herring, director at brooking firm Burley & Co.
"It might be another Chinese stock market meltdown but economically, the numbers coming out over the next three to six months aren't looking too bad at all," he added. The benchmark S&P/ASX 200 index rose 66.2 points to 6,317.6, based on the latest available data, after closing in the red in the past three sessions. New Zealand's benchmark NZX-50 Index nudged up 0.1 percent, or 4.58 points, to 4,308.99. The top stock, Telecom Corp of New Zealand Ltd, was up 0.4 percent at NZ$4.88.
Australia's Westfield Group, the world's top shopping mall operator, jumped 2.3 percent to A$20.83, rebounding from five straight sessions of declines. Goldman Sachs JBWere Pty raised its rating on Westfield to buy from hold, citing its attractive valuations.
Gains in the top miners helped the market higher, with BHP Billion Ltd rising 1.8 percent to A$31.70 and Rio Tinto Ltd adding 2.4 percent to A$96.36 on firmer metals prices. Dealers said take-over speculation would continue to buoy mining stocks. Rio Tinto told Reuters on Tuesday that talk it may bid for Canadian aluminium producer Alcan was purely speculation.
Coles dropped 4.2 percent to A$16.65 after KKR withdrew from the group bidding for the retailer, hours after CVC also dropped out. But Wesfarmers rose 0.7 percent to A$38.04 as the move by KKR is seen as raising the conglomerate's chances in succeeding with its rival bid for Coleus.
In other take-over news, Symbol Health Ltd rose as much as 1.8 percent to A$4.47, before closing up 0.2 percent at A$4.40 after it received a A$2.8 billion ($2.3 billion) take-over offer from smaller rival Healthscope Ltd. The cash and share offer valued Symbol at about A$4.37 a share, based on Healthscope's closing price on Monday of A$5.74.
Healthscope gained 1.7 percent to A$5.84 while Sigma Pharmaceuticals Ltd, which said last week it would decide whether to launch a rival offer for Symbol in the next few weeks, fell 0.4 percent to A$2.34. Elsewhere, most of the top banks closed up over 1 percent, sending the financial services index up 1 percent, or 74.5 points, on the day.
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