SYDNEY: Australian shares rose 0.4 percent in morning trade on Friday, helped by easing worries over Europe's debt crisis after bond auctions fared better than the market expected, with the materials sector leading gains on firm base metal prices.
"It's a mixture of news, on the one hand the good news is that people are looking at more positive developments out of Europe," said Damien Boey, equity strategist Credit Suisse.
"Particularly with the ECB declaring that they are making inroads into the crisis, the Italians managed to get away a bond auction with relatively low interest rates," he added.
However, the positive news out of Europe was dampened by lackluster economic data out of the US overnight, which has capped gains in the Australian and Asian markets on Friday.
"The bad news is that a lot of people had pinned 2012 recovery on the US consumer recovery and last night we had some very bad data out of the US," said Boey.
Shares in BHP Billiton, Rio Tinto and Fortescue all rose more than 1 percent in morning trade, with the stocks also helped by news that Port Hedland, one of the world's largest export terminals for iron ore, reopened after being shut ahead of Tropical Cyclone Heidi.
Australia's big four banks all rose in morning trade, National Australia Bank rose 1 percent and Commonwealth Bank of Australia rose 0.5 percent.
The benchmark S&P/ASX 200 index was up 17.2 points at 4,198.6 at 0112 GMT. The benchmark slipped 0.2 percent on Thursday.
New Zealand's benchmark NZX 50 index rose 0.2 percent to 3,225.5 points.
STOCKS ON THE MOVE
Shares in Gindalbie Metals jumped 7.5 percent to A$0.58 after the company's upbeat quarterly report.
Shares in QR National AX rose 3.9 percent to A$3.76, the highest point since the company was listed, after recording its strongest month since the 2011 floods, with Queensland Coal volumes in December increasing by 8.5 percent on previous corresponding period.
QBE shares continue to slide, falling 5.3 percent to A$10.75. QBE fell as much as a quarter and ended 13 percent lower on Thursday after the insurer said it expects 2011 earnings to fall by as much as half after hefty catastrophe claims. Analysts' forecasts had been for a rise.
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