SYDNEY: Australian shares edged up 0.5 percent on Friday, encouraged by a modest gains on Wall Street, though sentiment remained cautious ahead of the euro zone debt summit this weekend.
"What happened in America has certainly outweighed what happened in Europe last night and our market has bounced out in nice fashion," said Michael Heffernan senior client adviser and strategist, Austock Group.
Heffernan said he did not expect too much market impact from the European debt summit to be held over the weekend.
"I think its a matter of details that have got to be worked out rather than the fundamentals, that's why I think that no matter what the meeting decides on the weekend it's not going to have a material negative impact on the market," he said.
France and Germany said in a joint statement that European leaders would discuss a global solution to the crisis on Sunday but no decisions would be adopted before a second meeting to be held by Wednesday at the latest.
The major sticking point is over how to scale up the European Financial Stability Facility, a 440 billion euro ($600 billion) fund so far used to bail out Portugal and Ireland.
Australia's energy sector was the best performer after a rise in Brent crude prices and the materials sector led falls after metal prices slipped overnight.
Australian oil and gas firm Woodside Petroleum shares rose 0.9 percent to A$33.92, despite the company posting a 1 percent fall in third-quarter production on Friday from the June quarter due to planned maintenance.
The benchmark S&P/ASX 200 index was up 23 points at 4,167.2 by 0142 GMT. The index fell 1.6 percent to a two week low on Thursday and is heading for its first weekly decline this month.
New Zealand's benchmark NZX 50 index was a touch higher at 3,294.5 in morning trade.
Major indexes on Wall Street ended between 0.2 and 0.5 percent higher on Thursday, though market anxiety remained elevated amid concern over the euro zone debt crisis.
STOCKS ON THE MOVE
Shares in Australia's Macarthur Coal rose 0.9 percent after China's Citic Resources has accepted Peabody Energy and ArcelorMittal's A$4.9 billion ($5 billion) takeover offer for Macarthur Coal taking the bid to the brink of success.
Shares in Australian online advertising company Seek rose 7.7 percent to a two-month high in morning trade after a report Seek and Macquarie Capital are planning an initial public offering on the Nasdaq of their jointly owned Chinese website Zhaopin.
Australian online movie rental subscription company, Quickflix stocks jumped 11.5 percent to A$0.087 after announcing it had reached a deal with Sony Computer Entertainment to stream its subscription movie service on the PlayStation3 platform.
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