Good day as ASX 200 up by 94 and confidence returns

The sharemarket touched one-month highs yesterday as talk of mergers and acquisitions dominated trading.
Trading was also boosted by strong gains on Wall Street the night before as benign inflation figures in the US suggested the central bank would not raise interest rates in the short term. The Dow Jones Industrial Average jumped 96.86 points to 11,327.12,
Locally, the ASX 200 index closed 94 points higher to 5055.9, while the All Ordinaries gained 88.3 points to 5017.2.
Shares in Coles surged after the retailer announced it had been approached by "parties" wanting to discuss the group's ownership.
Coles shares hit a record $13.40 before closing $1.40 or 12 per cent higher at $13.10.
Coles did not identify the parties but already there is speculation that Harvey Norman chairman Gerry Harvey is part of a syndicate to buy the retailer.
Other possible suitors include the world's biggest grocer, Tesco of the UK, and US retail giant Wal-Mart.
Harvey Norman shares rose 19c to $3.39.
Gas transmission operator GasNet posted a sharp increase in first-half profit ahead of possible further bids putting the Victorian gas utility in the middle of a takeover tussle. GasNet shares rose 3c to $2.93.
ABN Amro Morgan client adviser Margaret Morrissey said BlueScope Steel was buying into Smorgon Steel in what is shaping as another mergers and acquisition move. "BlueScope has now picked up 19.9 per cent of Smorgon," she said.
Earlier this week the competition regulator identified potentially significant competition concerns arising from a bid by OneSteel for Smorgon.
Smorgon firmed 7c to $1.77, BlueScope eased 2c to $6.82 while OneSteel gained 10c to $4.
Rio Tinto rallied $1.88 to $74.83 and BHP Billiton climbed 72c to $27.90.
"Base metal prices were stronger overnight," Ms Morrissey said.
Woolworths rose 23c to $19.65 and David Jones 12c to $3.30. Suburban fashion retailer Noni B was up 2c at $3.87.
Qantas was up 16c to $3.29 after it reported a better-than-expected annual profit despite it falling more than 30 per cent to $479.5 million in 2005-06 after its fuel bill soared.
In the banks, the Commonwealth led the way with a rise of 45c to $45.38. ANZ rose 26c to $27.15, NAB 19c to $36.79 and Westpac 19c to $23.14.
Telstra was up a penny at $3.63 while Singapore Telecom was steady at $2.04.

Tabcorp, whose shares jumped 55c to $15.45, said there were still growth opportunities after it dropped its $1.9 billion takeover bid for UNiTAB.
UNiTAB was steady at $13.80 while Tattersall's, which could now merge with UNiTAB, rose 8c to $3.15.
ASX jumped $1.57 to $32.56 despite posting a 19 per cent fall in bottomline profit and repeated its aim to extract cost synergies from its completed merger with SFE Corporation.
ASX also revealed that SFE, which it took over last month, made a first-half net profit of $38.7 million, up from $33.5 million in the previous corresponding period.
Multiplex, up 11c to $3.55, said its prospects for the year ahead remained sound.
The construction and development company reported net profit of $216.8 million for 2005-06, up 157.2 per cent on the previous year.
Perpetual soared $2.28 to $71 after annual net profit rose 14 per cent to $135.3 million as funds under management rose 16 per cent to $22 billion and the company said it was confident of its ability to grow this year.
The goldminers were mixed, with Lihir Gold up 12c to $2.93, Newmont 1c firmer at $6.71 and Newcrest down 3c at $19.65. Bendigo was up a zack at $1.61 and Emperor down 1c at 34c.
The most actively traded stock by volume was Smorgon Steel with 183.6 million shares worth $327.66 million changing hands.