MELBOURNE: Australian shares jumped 2.1 percent on Wednesday, tracking Wall Street and metals gains on signs of economic growth offshore despite Europe's debt woes, but investors and dealers doubted there was much strength in the bounce.
The market managed to close near the day's high, which some had not expected as little has changed in Europe, the main drag on the market.
"There was nothing concrete last night to really sustain this rally," said Brian Han, head of company research at Constellation Capital Management.
"There has been (some good data) from the US. But the slump that we've had over the last couple of months has been Euro-centric, and I don't think the problems there have been solved in any way," he said.
The benchmark S&P/ASX 200 index advanced 86.4 points to close at 4,139.5, recouping most of the past two days' losses.
Gold miners led the local charge, after gold prices climbed to their highest in nearly a week. St Barbara Mines, Kingsgate and OceanaGold all surged more than 6 percent.
Top global miners BHP Billiton and Rio Tinto both rose nearly 3 percent.
Battered retailers continued to underperform the market on worries about the crucial period leading up to Christmas, following profit warnings from former market darlings JB Hi-Fi and Billabong.
Han said he expected further bad news from retailers.
"I say that not only because of the increasingly promotional environment. I look at the weather in Sydney, I'm telling you this doesn't look like summer weather, which means there's going to be a lot overhanging inventory to clear in the new year," he said.
Bargain hunters pushed Billabong up 10 percent, after half the surf and skatewear retailer's value was wiped out on its warning this week that its first half earnings would slump by 21-25 percent.
However, department store chain Myer fell 0.5 percent and outdoor gear retailer Kathmandu slipped 0.3 percent.
New Zealand's benchmark NZX 50 index rose 21 points, or 0.7 percent, to finish at 3,223.1.
Fortescue Metals and partner BC Iron both climbed more than 3 percent after reporting their Nullagine iron ore joint venture is on track to reach a production rate of 5 million tonnes a year and export 3.5 million tonnes by June 2012.
Beadell Resources was the top gainer, closing 10 percent higher at A$0.685 after announcing a gold discovery in the Hercules prospect at its Tropicana East project in Western Australia.
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