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Australia: Shares bounce on M&A activity, Wall St record; NZ down

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[BENGALURU] Australian shares bounced on Wednesday, swept up by record highs on Wall Street as investors continued to lap up a global reflation rally and looked ahead to the outcome of the US Federal Reserve's rate-setting meeting later in the day.

While the Fed is all but certain to hike rates by a quarter percentage point to between 0.50 and 0.75 per cent, the focus is on what it signals for the coming quarters following Republican Donald Trump's surprise election win last month.

Expectations Trump will boost fiscal spending and lift US growth have fuelled a global reflation rally over the past month, with the recent deal by world oil producers to cut output adding to the momentum.

The S&P/ASX 200 index saw broad-based gains, rising 0.8 per cent, or 42.75 points, to 5,587.8 by 0131 GMT.

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The benchmark had snapped five straight days of gains in the previous session, falling 0.3 per cent.

M&A activity added some spark to consumer stocks, which got a lift from massive gains in APN Outdoor Group and Tatts Group shares, up 8.5 per cent and 8 per cent respectively.

While APN Outdoor revealed plans to buy-out rival oOh!Media Ltd, lottery operator Tatts Group received an A$7.3 billion (S$7.8 billion) takeover offer from a consortium advised by Macquarie Group.

Financial stocks in the US and at home have made the most of the recent rally as they are seen as a natural hedge against reflation trade.

The 'Big Four' Australian banks, which serve as a yard stick for the sector's performance, rose over 1 per cent each.

Elsewhere, solid gains were seen in utilities.

Electricity producer and provider AGL Energy rose 1.2 per cent, while natural gas infrastructure business APA Group added 2.2 per cent.

"It is interesting to note that some of the interest rate exposed sectors are doing the best," said Michael McCarthy, chief market strategist at CMC Markets. "Healthcare stocks, which have been under sustained pressure, are also leading."

The healthcare index rose 0.9 per cent driven by a CSL Ltd rising 1.6 per cent.

Basic materials were weighed down by overnight falls in copper and base metals prices.

Miners BHP Billiton and Rio Tinto were 0.4 per cent and 0.2 per cent lower respectively.

New Zealand's benchmark S&P/NZX 50 index fell 0.3 per cent, or 22.99 points, to 6,827.22, in what could be its fourth straight session of losses.

Entertainment firm SKY Network Television, which lowered its full-year guidance, was the biggest loser on the index, down 8 per cent.