Reuters: Hot Stocks: Australia shares rise on bargain hunting but Fed uncertainty spurs caution

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Australia shares rise on bargain hunting but Fed uncertainty spurs caution Sep 25th 2013, 02:11 Tue Sep 24, 2013 10:11pm EDT (Adds analysis, quotes, stocks on the move) SYDNEY, Sept 25 (Reuters) - Australian shares rose 0.7 percent on Wednesday to edge towards five-year highs as investors hunted for bargains after three days of losses, but trading was subdued amid uncertainty over the U.S. Federal Reserve's intentions to taper its stimulus. "The market's been sold off for the last few days, technically it's been a bit oversold so we can see some short-term flow into the market due to bargain hunting at the moment," said Biyi Cheng, head of Asia-Pacific dealing at City Index. The S&P/ASX 200 index climbed 37.6 points to 5,271.8 by 0140 GMT, outperforming regional peers. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent. Retailers helped buoyed the market, with David Jones Ltd soaring 4.9 percent to a near five-month high of $3.00 after the department store operator reported net profit in line with analyst forecasts. Rival Myer Holdings Ltd added 0.4 percent while electronics and entertainment retailer JB Hifi Ltd rose 0.8 percent. "David Jones announced a very good result which means it's given a bit more confidence and flow into this sector," Cheng said. The big four banks recovered from losses in the previous session, also helping to lift the market. National Australia Bank climbed 1.3 percent, Westpac Banking Corp added 0.9 percent and top lender Commonwealth Bank of Australia edged 0.2 percent higher. The Reserve Bank of Australia released a report saying Australia's financial system remains in a relatively strong position, though it warned that banks must not relax lending standards or take unnecessary risks in an environment of record-low interest rates. Trading was relatively quiet with 158 million shares changing hands by 0138 GMT. The moving average so far in 2013 is 706 million shares per day. Activity was subdued in part after the Dow and S&P 500 ended lower, extending their slide to a fourth session as worries over a possible U.S. government shutdown added to investor concerns. "Traders are weary of the encroaching debt ceiling that the U.S. government will once again have to play out with Republicans in Washington," Andrew May, a sales trader at CMC Markets, said in a note to clients. Elsewhere, blue-chip miners eked out modest gains as spot iron ore prices edged up after some Chinese mills replenished stocks. BHP Billiton Ltd and Rio Tinto Ltd rose 0.6 percent and 0.4 percent, respectively. New Zealand's benchmark NZX 50 index rose 0.7 percent or 31.2 points to 4,741.8. (Reporting by Thuy Ong; Editing by Chris Gallagher) Link this Share this Digg this Email Reprints

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