Australian stocks rose 1.7 percent on Thursday, sustaining a recovery rally led by miners and banks as eurozone policymakers took tentative steps to prevent their debt crisis turning into a banking crisis. Investors bought back shares, which had dropped to a 5-week low on Wednesday, after France and Germany said Greece's place remains in the eurozone.
The fledgling rally ran into selling at the highs though, seeing the market end off the day's peak. "The market these days is so short-term focused. A lot of people don't want to be exposed overnight. It's pretty fickle to say the least," said David Spry, analyst at F.W. Holst.
"There's a lot of selling into these rallies. There's still not much confidence around," said Spry. The benchmark S&P/ASX 200 index rose 65.9 points to 4,071.7, according to the latest data. It had gained nearly 2.5 percent earlier in the session after falling 1.6 percent on Wednesday.
New Zealand's benchmark NZX 50 index rose 0.3 percent to 3,272.5 after the Reserve Bank of New Zealand held rates steady, as expected, highlighting risks to global growth. Australia's big four banks and top two miners all rose over 1.5 percent, led by a 2.6 percent gain in Westpac Banking Corp.