Australia: Shares rise for 5th day on banks, Woolworth takeover talk

[SYDNEY] Australian shares rose for a fifth straight session on Monday as investors swooped on high-yielding bank stocks and persistent takeover rumours swirling around Woolworths sent the country's top grocery chain sharply higher.

By 0144 GMT, the S&P/ASX 200 index was up 21.9 points or 0.4 per cent at 5,278.0 points. The benchmark has risen 5.5 per cent since Nov. 16.

Bank stocks have been rallying since August after receiving a battering in early 2015 when an Australian regulator ordered them to increase their cash reserves, prompting a round of capital raisings and asset sales. "Banks have had a pretty ordinary run post those pretty large capital raisings so it doesn't surprise me that they're recovering, and that yield driver is still there," said Burrell Stockbroking director Richard Herring.

Woolworths, meanwhile, was the subject of a fresh round of media reports saying several private equity firms were considering buying all or part of the supermarket chain, sending shares in the A$30 billion company up nearly 4 per cent, its biggest gain in a month.

Commonwealth Bank of Australia led the banks higher, up 0.7 per cent, while National Australia Bank rose 0.9 per cent, Westpac Banking Corp was up 0.4 percent and Australia and New Zealand Banking Group added 0.3 per cent.

Other retail stocks followed Woolworths higher. Wesfarmers , owner of Woolworths rival Coles, gained 1.3 per cent. Department store firm Myer firmed 3.4 per cent.

Mining stocks fell, however, following declines in commodity prices. BHP Billiton declined 2.4 per cent and rival Rio Tinto lost 1.2 per cent. BHP spin-off South32 dropped 5.45 per cent.

Energy stocks were mixed despite a weaker oil price. Santos fell 3 per cent while takeover target Oil Search rose 1.6 per cent and Woodside Petroleum was steady.

New Zealand's benchmark NZX 50 index rose 0.8 per cent or 46.46 points to 6,055.16.

The biggest gainers were a2 Milk, which added 8.2 per cent amid booming export demand from China, and accounting software group Xero, which was trading up 4.8 per cent.

The biggest losers included Nuplex, down 2 per cent, and New Zealand Refining, which fell 1.3 per cent.

REUTERS