SYDNEY - Australian shares added 0.4 per cent on Thursday, helped by lenders such as Westpac Banking Corp, but takeover target Qantas Airways Ltd. fell as some investors doubted the success of the planned deal.
The benchmark S&P/ASX 200 index rose 21.2 points to 5,466.9, based on the
latest available data, its second-highest closing peak. The index set a record closing peak of 5,491.6 points on Nov. 7.
Volatility in metals prices encouraged investors to shift to steady income earning and high dividend yielding banking shares. Westpac, Australia's fourth-biggest bank, per cent to A$24.49. Commonwealth Bank of Australia Ltd, the second-biggest bank, rose 1 per cent to A$48.12.
"It's a case of lots to like about banks at this moment. Profitability is good, level of defaults are low. Also, there are a lot of questions being asked about the commodity boom and in this environment, people are switching into defensive sectors such as banks," said Craig James, chief equities economist with Commonwealth Securities.
Qantas fell 1.4 per cent to A$4.93 - retreating from Wednesday's record peak - on concerns a Macquarie Bank Ltd. led proposed acquisition could face stiff opposition.
"There are risks that the government could reject the deal in national interests. Clearly, if the market saw a 80-90 per cent chance of the deal going through then the Qantas shares could have held up or even edged up," James said.
Macquarie shares fell 0.8 per cent to A$73.40.
But Allco Finance Group Ltd. jumped 6.8 per cent to A$11.02 on saying that it was considering taking part in the proposed bid for Qantas.
Allco also said its aircraft leasing portfolio is broadly diversified and its leases of 22 aircraft to Qantas were for 8-12 years, allaying fears of any impact the proposed Qantas acquisition would have on Allco.
Elsewhere, takeover expectations kept investors busy.
Grocery and liquor wholesaler Metcash Ltd. firmed 3 per cent to A$4.53 and brewer Foster's Group Ltd. added 4.1 per cent to A$6.80 on market talk that the two companies could become the next target of private equity funds.
Officials at both the companies were not available for immediate comment.
- REUTERS
