Australian shares bounced off six-month lows to close 1.5 percent higher on Tuesday on hopes for urgent action to tackle the euro zone debt crisis, but investors fled Qantas Airways after a shock profit warning from the national carrier. Qantas lost a fifth of its value to hit a record low of A$1.14 a share after it flagged underlying profit this year would drop as much as 90 percent due to soaring fuel costs, weak travel demand and losses in its international arm.
The benchmark S&P/ASX 200 index gained 58.7 points to close at 4,043.7, according to the latest data, clawing its way back from a six-month low close on Monday. New Zealand's benchmark NZX 50 index lost 0.9 percent to close at 3,420.8, weighed down by Telecom New Zealand.
The battered mining sector held on to most of the day's gains despite the central bank's observation that growth in China, the key market for Australia's coal and metals, had moderated. BHP Billiton closed up 1.3 percent, while Rio Tinto rose 1.6 percent. Iron ore miners Fortescue Metals and Atlas Iron, two of the market's most heavily shorted stocks, both jumped around 5 percent.
Gold producer Ramelius Resources soared 18 percent to A$0.555 after saying it was debt free, able to fund operations from cash flow and targeting an increase in gold production by 2014. While Qantas dived, its rival Virgin Australia jumped 2.4 percent after Abu Dhabi's Etihad Airways said it had bought a near 4 percent stake in Virgin. Top grocer Woolworths finished down 0.8 percent, while department store chain Myer dropped 2.7 percent. Upmarket rival David Jones fell 0.5 percent. Top telecommunications company Telstra Corp slipped 0.3 percent to A$3.65.
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