Australia shares rise on Tabcorp-Tatts merger deal; NZ steady

[BENGALURU] Australian shares extended gains on Wednesday after Tabcorp Holdings said it agreed to takeover Tatts Group in a cash-and-stock deal, helping the target company post its biggest-ever intraday percentage gain.

The S&P/ASX 200 index rose 0.4 per cent or 20.05 points to 5,430.8 by 0057 GMT.

The A$6.36 billion (S$6.75 billion) takeover of Tatts will create a A$10.44 billion betting industry giant that could help fend off popular online rivals.

"The Tatts-Tabcorp deal is certainly a positive because it is a takeover corporate action and it has helped the markets," said Will Keenan, general manager of direct equities research at Lonsec.

Tatts jumped as much as 18.1 per cent to a 9-month high, with 12 million shares trading, about 2.5 times its 30-day average volume. Tabcorp climbed as much as 2.9 per cent.

"Another positive is that the bond yields have retreated a touch overnight and they had been creeping up," Mr Keenan added.

Benchmark US 10-year Treasury notes fell 6/32 in price to yield 1.7449 per cent.

Sentiment was also boosted by gains on Wall Street, with upbeat earnings by Goldman Sachs Group and UnitedHealth Group lifting stocks.

Of the 52 S&P 500 companies that have reported third-quarter results to date, 81 per cent had beaten analysts' average estimates, according to Thomson Reuters I/B/E/S.

Seven of the nine major sectors on the benchmark Australian index recorded gains, with consumer discretionary and financials contributing the most.

Australia and New Zealand Banking Group Ltd was up as much as 0.8 per cent, entering the third straight session of gains, while National Australia Bank Ltd rose as much as 0.7 per cent.

The gold index climbed 2.9 per cent, after a weaker US dollar assisted prices, with Newcrest Mining gaining 2.8 per cent to touch its two-week high.

Global miner Rio Tinto rose nearly one per cent.

At the other end, BHP Billiton fell 1.4 per cent after the mining giant said it was seeing signs of recovery in commodities markets but cautioned that supply was still running ahead of demand even with stronger than expected steel consumption in China.

Charter Hall Group touched a five-month low after it cancelled a A$1.12 billion initial public offering of a commercial property.

Advancers outnumbered decliners by a more than 2:1 on the Australian exchange.

New Zealand's benchmark S&P/NZX 50 index was flat at 6,967.49, after two sessions of losses.

Gains in energy and industrials stocks were offset by declines in materials and utilities.

Z Energy Ltd and Air New Zealand Ltd were up 2.2 per cent and 1.7 per cent, respectively. Fletcher Building Ltd fell 1.1 per cent.

REUTERS