Australian shares held on to early gains to put in their best performance in about a week on the back of firm offshore leads. However, investors remain nervous ahead of a vote on Greek austerity measures. The benchmark S&P/ASX200 index on Tuesday was up 56.5 points, or 1.27 per cent, at 4508.2 points, while the broader All Ordinaries index was 52.4 points, or 1.16 per cent, stronger at 4564.9. On the ASX 24, the September share price index futures contract was up 55 points at 4,504 points, with 28,237 contracts traded. Among the best-performing sectors were energy stocks, which rose 1.79 per cent, according to Iress data.

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Investors were picking up cheaper stocks after broad falls of more than 10 per cent in recent weeks. There were media reports that BHP Billiton was considering a takeover of Woodside Petroleum after the latter's shares lost six per cent to fall below $40 on Monday. Woodside Petroleum shares bounced back on Tuesday to close up 99 cents, or 2.48 per cent, at $40.90. Fellow energy play Santos lifted 32 cents, or 2.44 per cent, at $13.46 and Origin Energy improved 29 cents, or 1.92 per cent, at $15.37.

Making news on Tuesday, Foster's Group shares shot up after it said it had rejected a $9.51 billion all-cash takeover offer from international beverage giant SABMiller. Fosters said the bid was undervalued. Foster's shares gained 61 cents, or 13.47 per cent, to $5.14. Among the big miners, BHP Billiton shares gained 64 cents, or 1.55 per cent, to $42.00. Rio Tinto was up $1.34, or 1.74 per cent, to $78.64 and Fortescue Metals found six cents to $6.08. The major banks all had good days, with Commonwealth up 76 cents at $50.26, Westpac 31 cents better at $21.43, ANZ 31 cents higher at $21.55 and National Australia Bank improving 20 cents to $24.64. National turnover was 2.33 billion shares worth $4.89 billion, with 570 stocks up, 581 down and 409 unchanged.

The Australian dollar was higher late in Asian trade Tuesday even after falling sharply in a session which saw the central bank signal no urgency to tighten policy and ongoing worries about the Greek debt crisis. The Australian dollar was at $1.0573, up from $1.0529 late Monday but off an early high of $1.0606. Against the Japanese yen, the Australian dollar was at 84.79, up from 84.46. If the local unit slips below 84.00 it would trigger stop-loss orders and drag the currency lower against the greenback too.

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