Australian shares rose snapped a three-day losing streak to gain 0.5 percent on Friday as signs of strength in the US economy temporarily broke through gloom over the European debt crisis that had driven a sell-off in riskier assets. Traders cautioned, however, it was too early to assess whether sustained buying would emerge with investors concerned over the health of the global economy and corporate earnings. The index fell 1 percent for the week taking losses to two consecutive weeks.
Banks and miners led gains. Commonwealth bank of Australia, the country's no.2 lender, headed the financial sector climbing 1 percent and Rio Tinto led miners with a 0.65 percent rise. "It is possibly a dead cat bounce," said Chris Weston, a trader at IG markets. "There is not much to back the buying. There is no clarity over the strength of the global economy," he said adding investors were inclined to sell rallies. The underlying S&P/ASX 200 index rose 19.35 points to 4,159.20, according to latest available data. The index fell 1.2 percent on Thursday.
Shares in Australian electronics retailer JB Hi-Fi tumbled 15.3 percent, to the lowest level in nearly 2-1/2 years after the company warned on Thursday that first-half earnings would fall 5 percent, blaming a price war as rivals sold products at a loss to move stock, but said sales were improving heading into Christmas. Retailer Myer dropped 2.6 percent and Harvey Norman slumped 6.9 percent.
Shares in Bendigo and Adelaide Bank remain in trading halt after the company said it was buying the Australian unit of Bank of Cyprus for A$130 million ($129.02 million) and would launch a share sale to fund the deal. Insurance Australia Group Ltd rose 1.9 percent to A$3.16 after news it will buy troubled New Zealand insurer AMI Ltd for NZ$380 million ($286 million).
Shares in Coca-Cola Amatil rose 1.8 percent to A$12.02, after saying second half profits would rise 4.5 percent and sale volumes had picked up after the central bank cut interest rate cuts. New Zealand's benchmark NZX 50 index slipped 0.5 percent to 3,245.34.