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Australia: Shares rise 1% in a sign of confidence

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Australian shares jumped 1.2 per cent on Thursday, bouncing off a two-year low on broad-based gains led by banks, but analysts expect sentiment to remain bearish and the rally short-lived as concerns about global growth linger.

[SYDNEY] Australian shares jumped 1.2 per cent on Thursday, bouncing off a two-year low on broad-based gains led by banks, but analysts expect sentiment to remain bearish and the rally short-lived as concerns about global growth linger.

The S&P/ASX 200 index rose 60.07 points to 5,058.2 by 0124 GMT, after closing at its lowest since July 2013 on Wednesday.

"It is a sign of confidence," said Julia Lee, equities analyst at Bell Direct. "We have strongly bounced back from 5,000 points which is a key psychological level. The market has been looking oversold so it's nice to be in the black." Major banks including Commonwealth Bank and Westpac were up more than 1 per cent each while property trusts - seen as defensive plays - Scentre and Good group jumped over 2.5 per cent.

Senex Energy jumped as much as 24 per cent on a gas sales deal with Santos Ltd's GLNG venture.

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Miners were mixed with Rio Tinto rising 0.5 per cent while BHP Billiton traded flat. Fortescue fell 0.4 per cent.

"From a technical perspective, the ASX200 continues to form a classic descending triangle, which is a bearish sign formed during a downtrend," said Stuart McPhee, senior technical analyst at OANDA. "At the same time the index volatility remains high. This tends to indicate more irrational behaviour than normal and can be a trigger for some investors to step out until the market calms a little."

The NZX 50 index edged up 0.6 per cent, or 35.71 points, to 5,690.05, within sight of a one-month peak of 5,725.89 on Wednesday.

Much of the gains came from Fonterra's fund, which provides investor exposure to the farmer-owned dairy exporter. The fund's price rose nearly 5 per cent after the cooperative lifted its milk price payout forecast and reported a 183 per cent rise in full-year profit.

Dairy is New Zealand's top export earner and its prices have plummeted on global oversupply of milk products.

Goodman Property was another outperformer, up 1.3 per cent after the company announced a debt refinancing. The shares had plumbed a four-month low on Wednesday.

Air New Zealand was not so lucky, falling 0.8 per cent.

REUTERS

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