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Australia shares edge up on miners, but Billabong hits record low

Thursday, 11 Oct 2012 | 9:02 PM ET

(Adds details, comments, stocks on the move)

CANBERRA, Oct 12 (Reuters) - Australian shares gained more than 0.2 percent on Friday morning, recovering from two sessions of losses, as a rebound in metal prices lifted index-heavy mining stocks.

But the market still lacks direction as investors are waiting for the next catalyst to drive the trend.

"The market just seems to be still in that holding pattern throughout the week after recent gains," said Stan Shamu, a market strategist at IG Markets. "It needs a direction and we still don't have one at the moment."

The benchmark S&P/ASX 200 index

had added 10.6 points to 4,494.1 by 0047 GMT, but remained below 14-month highs hit earlier this week. It fell 0.2 percent on Thursday to 4,483.5, its second straight day of losses

Strength mostly came from the mining sector, which got a lift on metal prices which rebounded.

Global miner BHP Billiton Ltd gained 0.8 percent to A$33.50 and major rival Rio Tinto Ltd rose more than 1.6 percent to A$56.31.

Australia's big four banks all posted a small gain, led by Australian and New Zealand Banking Group

rising 0.6 percent.

Shares in Discovery Metals Ltd

lost 0.6 percent after it unexpectedly rejected a takeover offer led by Chinese private equity firm Cathay Fortune Corp on Thursday.

"Most investors probably think they (Cathay) will come back with a better bid," Shamu said.

New Zealand's benchmark NZX 50 index

climbed 0.2 percent to 3,891.5. STOCKS ON THE MOVE

* Surfwear retailer Billabong International Ltd

fell 16 percent to hit a record low after private equity firm TPG dropped its A$694 ($712.91) million bid.

(0039 GMT)

(Reporting by Maggie Lu Yueyang; Editing by Jacqueline Wong)

((maggie.luyueyang@thomsonreuters.com)(+61 2 6273 3700)(Reuters Messaging: maggie.luyueyang.thomsonreuters.com@reuters.net))

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