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Australia, NZ: NZ stocks extend gains as a2 Milk rallies, Australia flat

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[WELLINGTON] Australian shares ran out of puff on Wednesday following a two-day rally, but New Zealand eked out a third session of gains as solid profits whipped a2 Milk Company's stock price into a froth.

Australia's S&P/ASX 200 index was a touch lower at 4,909.90 by 1257 GMT, taking a breather after amassing around three per cent over the past two days.

In contrast, New Zealand's benchmark S&P/NZX 50 index climbed 0.34 percent, or 20.48 points, to 6,095.85, having earlier risen as much as one per cent to a one-week week.

a2 Milk Company was the star performer, shooting up more than 20 per cent at one stage.

Investors cheered after the company posted first half net profit of NZ$10.1 million (S$9.29 million), thanks to strong demand for its infant formula product, a dramatic improvement from NZ$0.1 million in the prior year.

"It was a very solid result and they upgraded their guidance going forward. They are doing very nicely," said Adrian Vance, investment advisor for Forsyth Barr.

Shares in a2 Milk have since come off the highs and were up 5.9 per cent, a magnitude that was more in line with their Australia-listed counterparts.

"People were obviously a little over-enthusiastic in the first few hours in New Zealand and since Australia opened there has been quite a bit of profit taking at these higher levels," Mr Vance added.

Australia and New Zealand Banking Group received a less enthusiastic response from the market after reporting a four per cent rise in first quarter unaudited cash profit.

ANZ shares drifted in and out of negative territory and were last up 0.7 percent.

Investors were clearly unimpressed with Woodside Petroleum , which posted a 99-per cent plunge in annual net profit. Shares in the oil and gas company slid nearly six per cent.

Not helping sentiment in the energy sector was renewed weakness in oil prices overnight.