SYDNEY/WELLINGTON, Jan 21 (Reuters) - Australian shares bounced on Thursday as funds bought beaten down stocks of companies that offer a reliable dividend payment including the major banks.
The S&P/ASX 200 index (xjo) rose 1 percent to 4,893.1 by midday, though that only recovered part of Wednesday's sharp losses.
Technically, dealers said the index was deeply oversold having fallen 7.5 percent in less than three weeks, so a bounce was not unexpected. There was also evidence of solid support under the 4,830 level.
Dividend stocks were all in demand with Commonwealth Bank (CBA), Westpac (WBC) and National Australia Bank (NAB) major contributors to the rise in the overall index.
Miner OZ Minerals Ltd (OZL) led the gainers with a jump of over 7 percent after reporting strong production figures.
Woodside Petroleum (WPL) announced a sharp fall in 2015 sales revenues and warned impairment charges were likely to be in the range of A$1 billion to A$1.2 billion pre-tax.
Its shares, however, still managed to edge up 0.3 percent to A$25.45. Dealers noted the stock had already discounted a lot of negative news having touched its lowest since mid-2005 on Wednesday. This time last year it was trading above $34 a share.
Detention camp operator Broadspectrum (BRS) fell 1.6 percent after advising shareholders to reject a takeover bid from Ferrovial SA FER.MC.
New Zealand's benchmark S&P/NZX 50 index (nz50) dipped 0.43 percent or 26.87 points to 6,086.85.
Christchurch-based Hamilton Hindin Greene broker James Smalley said volumes were thin with most investors sitting on their hands ahead of the upcoming earnings season.
While people are aware of the macro forces at play they are "focusing on the micro" and given the low interest rate environment "investors will be pretty happy to stay exposed to the market," he said.
The biggest gainers included Auckland Airport (AIA), up 1.2 percent while the biggest losers included Nuplex (NPX), down 2 percent.
