Australia shares rise, volatility seen persisting

Fund managers said Monday's relief rally could be short-lived on any further signs of economic weakness in the United States or Europe.

"We certainly expect volatility to continue," said Ben Lyons, an analyst at ATI Asset Management.

"We believe that the economic indicators that we look at still point to a high degree of uncertainty about future growth in the US economy and in the European region as well."

The top banks and big miners BHP Billiton and Rio Tinto all climbed between 1 and 2 percent, while top investment bank Macquarie Group rose 2.9 percent.

Higher oil prices drove the energy sector higher, with Woodside Petroleum , Australia's top oil and gas producer, climbing 2.7 percent.

The benchmark S&P/ASX 200 index climbed 45 points to 4,239.4 as of 0016 GMT, reversing Friday's loss.

New Zealand's benchmark NZX 50 index rose 0.4 percent to 3,309.6.

STOCKS ON THE MOVE

Charter Hall Office real estate investment trust jumped 14 percent to A$3.31 after a Macquarie-led consortium made a tentative takeover offer worth A$1.06 billion ($1.12 billion). The REIT's manager and 10 percent owner, Charter Hall Group , rose 6.5 percent.

Oil and gas producer AWE , increasingly seen as a shale gas play in Australia, rose 2 percent on higher oil prices. It reported a worse-than-expected net loss for the 2011 fiscal year and flagged it expected output to fall in 2012.

Takeover target Bow Energy rose 3 percent to A$1.515 on media speculation that the gas explorer may get another takeover offer against a A$520 million bid from Shell and PetroChina's Arrow Energy.

Coal rail transporter QR National fell 1.9 percent to A$3.13 after warning that coal haulage volumes remained depressed after floods nine months ago sharply curtailed coal production in Queensland.

Copyright Reuters, 2011