News Corp shares soar 5pc in Australian trade

SYDNEY: Rupert Murdoch's News Corp. gained more than five percent in Australian trade Wednesday after the mogul's sometimes stumbling testimony at the British phone-hacking inquiry.

The stock closed just off its highs at Aus$15.24, a rise of 74 cents, or 5.1 percent, mirroring its stellar performance on the Nasdaq in New York.

It was well above the Aus$13.65 seen on Monday, its low since the News of the World scandal broke, but well off the more than Aus$17 shares were fetching before the furore began.

Analysts said Wednesday's rally was a combination of the stock being oversold and broader positive market sentiment that saw the benchmark S&P/ASX200 index climb 81.6 points, or 1.83 percent, to 4,549.7 points.

"Market sentiment turned a bit today and a lot of the big names in the sector were higher so that's one reason News was up," said IG Markets strategist Ben Potter.

"People also see the stock as very cheap and oversold. But I would be wary of buying on the prospect of it going higher at the moment. Who knows where this (phone-hacking) story is going next."

Another analyst, who did not want to be named, said it appeared shareholders were encouraged by Murdoch insisting he will not be resigning after reports of a possible executive shake-up.

"The market took some heart that Murdoch said he would not be resigning. It's up five percent and continues to improve from its Monday lows," he said.

The 80-year-old chief executive was questioned for more than two hours by parliamentarians in London over the scandal that has rocked his global empire and forced two of Britain's top police chiefs to resign.

He denied ultimate responsibility for the hacking that forced him to shut best-selling British tabloid the News of the World.

Appearing frail, he apologised to the victims, saying at the outset: "I would just like to say one sentence. This is the most humble day of my life."

His son James was also quizzed, with proceedings overshadowed by a protester attacking the elder Murdoch with a foam pie, which saw his Chinese-born wife Wendi Deng leap up and slap the assailant, who was dragged off by police.

The story was given front-page treatment by all the major newspapers in Australia -- Murdoch's birthplace and where he began his business.

A source close to the News board told his flagship newspaper here, The Australian, that reports of a board push for executive change were a "beat up".

"The view is that Rupert has done an amazing job over many years building (News) and he is heading into a very difficult period and deserves the board's support," said the source.

"Will these events specifically lead to change at News? Probably not. But Rupert is 80, so change is coming anyway and there will be a time when he hands over responsibilities to other people."

Copyright AFP (Agence France-Presse), 2011