SYDNEY: Australian shares edged up 0.3 percent in afternoon trade, drawing strength from Asian markets, but sentiment was cautious as positive signs of a U.S recovery were largely offset by concerns about the risks from rising oil prices.
Shares in utility AGL Energy fell 3.7 percent after it said it planned to raise A$1.5 billion through hybrids and a rights issue to help pay for the buy-out of Victoria's largest power station and a coal mine for A$448 million.
The benchmark S&P/ASX 200 index inched up 13.7 points to 4,297.30, as traders said a cautious but positive start in Asia lifted the mood a little. The index broke a four-day winning streak on Thursday, slipping 0.2 percent.
"At the moment investors are happy to see the market consolidate. There are quite a few uncertainties out there, including the local political leadership turmoil. There is no real conviction yet to push the market higher," said Stan Shamu, strategist at IG Markets said, referring to a likely leadership challenged faced by Prime Minister Julia Gillard.
Australia's central bank chief dampened expectations for further interest rate cuts, saying on Friday its policy settings were right for now, even after commercial banks raised some lending rates independently of the central bank this month.
Top banks were all up with largest lender National Australia Bank leading with a 1.1 percent rise.
Data showed the US labour market remained on the mend, with the number of Americans filing new claims for jobless benefits last week held at the lowest level since the early days of the 2007-2009 recession.
That data was offset by oil prices rising to 9-month high on worries about Iranian supply.
New Zealand's benchmark NZX 50 index gave up 0.3 percent to trade at 3,314.4 points.
Air New Zealand Ltd fell 1.1 percent to NZ$0.88 after it reported a 71 percent fall in first-half profit on higher fuel costs and weak long haul markets. The airline said it would axe about 440 jobs to cut costs but warned it would be a challenge to match last year's 12 month result.
STOCKS ON THE MOVE
One Steel, which has soared this week on short covering and some market talk of a takeover approach, fell 7.8 percent as investors locked in profits. The stock is still up 43 percent so far this week.
Global miners BHP Billiton and Rio Tinto climbed 0.5 percent as investors felt falls earlier this week on concerns over falling Chinese demand was overdone.
Casino Group Crown climbed 1 percent after posting a 28 percent rise in first-half profit. Rival Echo Entertainment Group rose 4.7 percent to A$3.98 after it posted first-half net profit of A$70.2 million on Friday, shy of a company-supplied consensus of A$72 million.
Newcrest Mining fell 4 percent. It said its 2012 production and cost guidance were under pressure due to production disruptions at its Lihir unit, though it still hoped to meet its targets.
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