Australia shares rebound from 2-1/2 month low on global optimism

Reuters - UK Focus

* ASX 200 gains more than 1 pct in early trade

* Gains across all sectors with banks and miners leading (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Naomi Tajitsu

SYDNEY/WELLINGTON, July 2 (Reuters) - Australian sharesclimbed 1 percent in early trade on Wednesday, rebounding from a2-1/2 month low the previous day, thanks to record highs on WallStreet overnight as investors bought equities after a recentdecline.

The Dow and the S&P 500 closed at record highs asmanufacturing activity picked up in the United States and Asia,boosting optimism about the global economy's health.

Investors scooped up shares among financials followingTuesday's slide, when Australian bank shares stumbled after theReserve Bank of Australia dampened any expectations of a changeto record low interest rates.

Westpac Banking Corp added 0.9 percent, Australiaand New Zealand Banking Group tacked on 1 percent,while National Australia Bank jumped 1.2 percent.

The S&P/ASX 200 index gained 54.4 points to 5,430.3by 0151 GMT. The benchmark fell 0.4 percent on Tuesday.

Elsewhere, Benchmark 62 percent grade iron ore rose slightly to $94.20 a tonne, helping tosupport top-tier miners.

BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) advanced 1.8 percent and 1.5 percent respectively.

"The market is extending last night's Wall Street gains andis quite optimistic about the global economic health at themoment, that's why sectors across the board are up," said BiyiCheng, head of Asia-Pacific dealing at City Index.

He said investors were also eyeing the early release ofnon-farm payrolls due on Thursday during the global day. U.S.markets are closed on July 4 for the Independence Day holiday.

"The sectors which were underperforming over the last fewdays are leading the market today like retailers and thematerial sector," Cheng said.

Defensives also rose with blood products maker CSL Ltd (Other OTC: CMXHF - news) rising 0.9 percent, while Wesfarmers Ltd gained 1.3 percent as the company said non-trading items areexpected to produce a pre-tax net gain of about A$261 million toA$301 million in full-year results.

Vocus Communications Ltd soared 8.6 percent to arecord high of A$5.15 after saying it will acquire FX Networksof New Zealand for an enterprise value of A$107.7 million. Vocussaid the acquisition, in the first 12 months, would add NZ$13.5million to NZ$14.5 million to earnings before interest, tax,depreciation and amortization (EBITDA).

Goodman Fielder Ltd (NZSE: GFF.NZ - news) lost 3.7 percent to1-1/2 month lows of A$0.66 after the Australasian food companysaid it would recommend shareholders accept a reduced takeoveroffer.

New Zealand's benchmark NZX-50 index rose 11.5points to 5,157.79, lifted by a 2 percent rise in Australia andNew Zealand Banking Group, which is dual-listed on theAustralian and New Zealand bourses.

New Zealand Oil and Gas rose 1.9 percent toNZ$0.83, matching a five-month high hit in June, after thecompany said profit would be boosted by royalty payments.

On the main board, Tourism Holdings Group jumped4.5 percent to match a 5 1/2-year high of NZ$1.20 after thetourism company said it expected full-year profit would meet orexceed forecasts given earlier in the year. (Editing by Richard Borsuk)

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