MELBOURNE, July 26 - Australian shares rose 0.7 percent on Monday as local banks were boosted by a fairly clean bill of health handed down for European lenders, although QBE Insurance <QBE.AX> sank after it cut earnings forecasts.
Retailers were mixed, with Wesfarmers <WES.AX> up after better-than-expected supermarket sales and Harvey Norman <HVN.AX> down after Australian sales of TVs and computers fell in recent months.
The benchmark S&P/ASX 200 index <.AXJO> gained 32.5 points to 4,490.6 as of 0308 GMT.
New Zealand's benchmark NZX 50 index <.NZ50> rose 0.3 percent to 3004.5.
STOCKS ON THE MOVE
Electrical sales fell as prices for flat TVs were reduced, while computer sales weakened, the company said. See [ID:nSYU010343]
* Linc Energy <LNC.AX> continued to rise on hopes it was close to selling three coal tenements, after it reaffirmed it was in talks after receiving written offers for all three. Its shares last traded up 9.1 percent at A$1.675, adding to a 47 percent gain over the past two weeks.
* QBE Insurance <QBE.AX> slumped 6 percent to A$16.90 in high turnover activity after Australia's top insurer by premium said net profit for the six months to June will fall by about 40 percent, hurt by equity losses and a lack of one-off gains. See [ID:nSGE66P00R]
Rival Woolworths <WOW.AX> rose 1.5 percent.
"It was slightly better than Woolworths," said Shaw Stockbroking analyst Scott Marshall. 'Coles has greater upside potential." See [ID:nNSGE66P00R]