Australian stocks closed firmer for the sixth straight trading day on Friday as strong leads from offshore markets and corporate takeover talk underpinned a 0.9 percent rise in the local market. Shares in Woodside Petroleum rose as much as 5.6 percent on speculation about the future of Royal Dutch Shell's 24 percent stake in the company, adding to recent gains.
The stock later pulled back to close 2.5 percent higher. Some analysts have pointed to a possible asset swap deal on the stake although Macquarie analysts said in a note Friday this could decimate Woodside's earnings. While corporate takeover talk also underpinned gains in other stocks due to strong buying in the local currency, traders said broader sentiment was taking the lead from offshore markets as concern about Japan eases.
The benchmark S&P/ASX 200 index closed 43.02 points higher at 4,742.6. New Zealand's benchmark NZX 50 index rose 1.364 points to 4,742.6. The index is forecast to rise to 5,350 by end-2011, bolstered by the mining and energy sectors, according to a Reuters poll of 15 analysts.
BHP Billiton closed up 0.1 percent after trading in negative territory earlier in the session when it announced $9.5 billion of capital spending in iron ore and coal mining operations. Rio Tinto rose 0.5 percent, while Fortescue Metals eased off earlier highs to close 2.6 percent higher after saying heavy rains across the Pilbara had impacted output for the March quarter.
Shares in other potential takeover targets like Foster's Group rose 2.3 percent. Alumina Ltd jumped 4.3 percent. Telstra Corp rose 1.5 percent to A$2.70 after Australia's sovereign wealth fund trimmed its stake in the telecoms group to less than 5 percent, which will trigger an increase in the company's weighting in the benchmark S&P/ASX 200 index in June. Bourse operator ASX closed 1.1 percent higher at A$35.00, making up some losses earlier in the week on media reports its proposed $7.6 billion takeover by Singapore rival SGX would run into political hurdles.