Australia shares rise 0.9pc in thin trade

SYDNEY: Australian shares rose 0.9 percent on Tuesday, making a firm start on the first day of trade for 2012 tracking strong performances in Germany and France overnight.

Gains were broadbased though volumes were thin.

"We had better than expected Chinese manufacturing PMI data and we had some fairly positive sessions on the DAX and the CAC overnight of 3 and 2 percent respectively," said Cameron Peacock, market analyst, IG Markets.

"So we were always likely to see a little bit of an upside bias to the market today," he added.

The benchmark lost a hefty 14.5 percent in 2011, the first back-to-back annual loss in 30 years, hit by the debt crisis in Europe.

A Reuters poll forecast the main share index will recover in 2012, provided the uncertainty in the European debt crisis eases, driven by a solid economy, a softer Aussie dollar, and ongoing demand from China for Australian resources.

"Markets are very thin at the moment," said Peacock

"It's not going to be really until mid January at the earliest when you get all the market players and money managers back from their holidays that you start to get a real feel for the mood of the market."

The materials sector led gains, Top miners BHP Billiton rose 1.5 percent and Rio Tinto gained 2.1 percent in morning trade.

Australia's top four banks also had a good start to the year, with Commonwealth Bank of Australia rising 1.2 percent and Westpac up 1.2 percent.

The healthcare and the embattled retail sector were among the worst performers for the morning.

The retail sector continued to lag with Harvey Norman falling 2 percent and David Jones down 0.8 percent in morning trade, the retail sector has its hopes set on recording good sales figures from post Christmas sales.

The benchmark S&P/ASX 200 index gained 36.5 points to 4,093.1 as of 0042 GMT.

New Zealand market is shut and resumes on Wednesday.

STOCKS ON THE MOVE

Shares in Australia's Gloucester Coal rose 1.2 percent to A$8.70, after media reported that it will wait till Yanzhou Coal Mining Co completes inspecting its books before deciding whether to recommend the Chinese firm's A$2 billion ($2.05 billion) takeover offer.

Copyright Reuters, 2011