Australia shares edge up; Woolworths, retailers support

SYDNEY: Australian shares edged up slightly in morning trade on Tuesday, after talks to restructure Greek debt with private bond holders stumbled, but the market found support from gains in top supermarket chain Woolworths.

European leaders agreed on a permanent rescue fund for the euro zone on Monday and 25 of the 27 EU states backed a German-inspired pact for stricter budget discipline, but they struggled to reconcile fiscal austerity with economic growth.

"I think the markets are in a bit of a holding pattern at the moment (after) we got up above 4,300 the other day. We are seeing the US markets trading in a range at the moment and a lot of people are talking about the need for a catalyst now," said Cameron Peacock, research analyst IG Markets.

"Obviosuly if we get this Greek hair cut deal, which everyone is waiting for, that could be it," he added

The benchmark S&P/ASX 200 index rose 0.2 percent to 4,282.2 at 0150 GMT. The benchmark slipped 0.4 percent on Monday.

Consumer discretionary and consumer staples sectors led gains, buoyed by supermarket chain Woolworths.

Shares in Woolworths climbed 1.8 percent after it anounced plans to sell its struggling Dick Smith electronics chain, as it missed market forecasts for food and liquor sales growth in the second quarter.

Retailers David Jones and Harvey Norman rose near 3 percent and JB Hi-Fi jumped 5.1 percent on news of the problems at Dick Smith.

"The fact that they are shutting down Dick Smith means that some of these other electrical retailers are probably going to pick up a bit of the slack, thats proably one of the reasons why you are seeing your likes of Harven Norman and JB Hi-Fi doing a little bit better," he added

Australia's four major banks performed reasonably well, all rising around 0.2 percent, shurgging off Fitch's move to place them on review for possible downgrade.

"Certianly there's those optimitic undertones in the market at the moment where people are are probably looking to buy dips as opposed to sell rallies, which is what you see when sentiment is pretty poor, so from that perspective it was always going to be a little bit of upside today," said Peacock.

New Zealand's benchmark NZX 50 index fell 0.5 percent to 3,291.1.

STOCKS ON THE MOVE

Shares in Gunns Limited soared 23.8 percent to A$0.13 after anouncing late on Monday that they had secured a 10 month extension of its syndicated debt facility.

Shares in Mesoblast rose 4.6 percent after announcing they received clearance for a second stage of Clincal trials of Proprietary Stem Cell Therapy in type 2 diabetes.

Origin Energy shares slipped 2 percent after reporting a sales revenue of $198 million.

Copyright Reuters, 2012