Australian shares rose more than 1 percent on Monday in a broad rally mirroring Wall Street, while power retailer Australian Gas Ltd (AGL) jumped on its A$1.43 billion Southern Hydro buy and plan to split into two listed companies.
Australia's benchmark S&P/ASX 200 index added 76.7 points, or 1.8 percent, to 4,459.7, with a 3.2 percent gain in top miner BHP Billion Ltd/Plc.
leading the recovery from Friday's 1.13 percent fall. New Zealand shares rose 22.4 points, or 0.7 percent, to put the benchmark NZX-50 index at 3,293.16.
Top stock Telecom Corp of New Zealand Ltd made up half the index's gains, climbing 1.4 percent to A$5.83. Only 11 of the top 200 Australian stocks ended weaker on a day of light trading ahead of a public holiday in Melbourne for the Melbourne Cup horse race.
"The market was led up by Wall Street, but activity was relatively thin which probably exaggerated the moves," said Atoll Elle, a fund manager with White Funds Management.
AGL was the top stock in percentage gains for most of the day, as investors applauded a plan to spin off its infrastructure assets from its energy business.
"The split is something that could be value-generative to AGL in terms of freeing up balance sheet capabilities for the Energy Company, which will be the growth part of the business," said Lele.
Australian Gas Light Co Ltd, the nation's top power retailer, jumped 4.4 percent to A$15.14. AGL said it had acquired the hydro and wind power business Southern Hydro for A$1.425 billion, and planned split into an energy unit and an infrastructure business, both listed on the ASX.
Orica Ltd, the world's top commercial explosives maker, added 1.1 percent to A$19.12 after saying it had signed a heads of agreement with joint venture partner Exxon Mobil Corp to sell Kenos, Australia's top plastics maker, to China National Chemical Corp.
St George Bank Ltd, the nation's fifth-largest commercial bank, fell 1.1 percent to A$27.24. It met analysts' forecasts with a 12 percent rise in cash earnings per share but concerns over slower growth in the current fiscal weighed.
Oil and gas producer Origin Energy Ltd rallied 4.2 percent to A$6.72. It said past quarter revenue totalled A$105.3 million, up 3 percent from the preceding quarter.
ABC Learning Centres Ltd, a child care services provider, gained 4.0 percent to A$6.50 on saying that it has signed a deal to acquire six recently developed child care centres in Sydney for A$18.3 million now and up to an additional A$16.0 million spread over up to five years.
Papua New Guinea gold miner Lahore Gold Ltd climbed 3.9 percent to A$1.75 on saying that gold production in the past quarter rose 48 percent from the preceding three months.
Stocked group Riddles Corp gained 0.4 percent to A$1.385. The company told to the annual meeting it expected 2005/06 net profit to come in 10-20 percent above last year's A$25.3 million.