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

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CANBERRA, Oct 12 (Reuters) - Australian shares gained morethan 0.2 percent on Friday morning, recovering from two sessionsof losses, as a rebound in metal prices lifted index-heavymining stocks.

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

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

The benchmark S&P/ASX 200 index

had added 10.6points to 4,494.1 by 0047 GMT, but remained below 14-month highshit earlier this week. It fell 0.2 percent on Thursday to4,483.5, its second straight day of losses

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

Global miner BHP Billiton Ltdgained 0.8 percent toA$33.50 and major rival Rio Tinto Ltdrose more than1.6 percent to A$56.31.

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

rising 0.6percent.

Shares in Discovery Metals Ltd

lost 0.6 percentafter it unexpectedly rejected a takeover offer led by Chineseprivate equity firm Cathay Fortune Corp on Thursday.

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

New Zealand's benchmark NZX 50 index

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

* Surfwear retailer Billabong International Ltd

fell 16 percent to hit a record low after private equity firmTPG 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)(ReutersMessaging: maggie.luyueyang.thomsonreuters.com@reuters.net))

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