The Australian share market rebounded on Tuesday to end 0.9 percent higher, led by a turnaround in BHP Billiton and other miners that had sparked the bourse's biggest fall in six months the day before.

The benchmark S&P/ASX 200 index settled 35.4 points higher at 3,866.1, having recouped most of the previous day's loss.BHP Billiton accounted for nearly 11 points of the index's gain, jumping 4.3 percent to A$14.82 in heavy trade after it completed a bigger-than-expected, A$2.3 billion ($1.8 billion) buyback of 4.8 percent of its Australian-listed shares.

Institutions that took advantage of the tax benefits of the buyback were surprised BHP decided to accept all the stock that shareholders had tendered and had to scramble in the market to top up their positions in the index heavyweight, brokers said.

"People offer inflated numbers of shares in, expecting to be scaled back. But we saw no scalebacks. So you're getting guys who were caught short, which was a catalyst for the jump this morning," said Justin Gallagher, ABN AMRO's head of Sydney sales trading.

Takeover target WMC Resources rose 1.4 percent to A$7.18 in the first day of trade after Switzerland-based miner Xstrata went hostile with a A$7.4 billion, or A$6.35-a-share, offer that WMC's board rejected last month.

Investors expect Xstrata will either have to increase its bid or another miner will enter the fray, with BHP Billiton, Rio Tinto and Brazil's Companhia Vale do Rio Doce among several seen as potential suitors.

"The scarcity of quality assets forces other companies definitely to assess whether they will be a player in this situation," Perpetual Investments Australian equities manager Matt Williams said.

Shares in the Connect East toll road group finished their first day the board at 68 cents, a 24 percent premium to their first-instalment issue price of 55 cents, with 12 percent of its shares trading hands. Including the remaining 45 cents to be paid next November for the shares, the group was valued at A$1.27 billion on the close.

(From Reuters, November 23, 2004)

___________