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Rudolf Oultz watches the display board at the Australia Stock Exchange in Sydney, Monday, Aug. 8, 2011. Australian and New Zealand markets have opened lower in reaction to ratings agency Standard and Poor's downgrading of the United States government credit rating from AAA to AA+. (AP Photo/Rick Rycroft)
The West Australian Rudolf Oultz watches the display board at the Australia Stock Exchange in Sydney, Monday, Aug. 8, 2011. Australian and New Zealand markets have opened lower in reaction to ratings agency Standard and Poor's downgrading of the United States government credit rating from AAA to AA+. (AP Photo/Rick Rycroft)

Australian shares are up with banking and other high-yielding stocks driving the market higher.

At 9.20am, the benchmark S&P/ASX200 index was up 18.8 points, or 0.4 per cent, at 4735.4 and the broader All Ordinaries index 18.2 points, or 0.38 per cent, higher at 4761.2.

On the ASX 24, the March share price index futures contract was up 12 points at 4704 with 12,331 contracts traded.

IG Markets market strategist Evan Lucas said investors were moving into more-defensive, high-yielding stocks and away from cyclical resources.

That is partly because expectations that tomorrow's labour force data will show a rise in the unemployment rate from 5.2 to 5.4 per cent for December, a negative indicator for the economy.

That has also fuelled expectations around more rate cuts this year.

The major banks were all performing strongly, with the Commonwealth Bank of Australia the stand-out, up 54.5 cents to $62.295, Westpac gaining 14.5 cents to $26.505, NAB putting on 14 cents to $25.85 and ANZ adding 12 cents to $25.39.

Mining stocks, by contrast, were weaker with BHP Billiton shedding 23.5 cents to $36.295 and Rio Tinto losing 27 cents to $65.63.

Stocks in embattled surfwear brand Billabong were also weaker, following a 16 per cent surge on Tuesday after news of a second takeover offer for the company.

US retailer VF Corporation - which owns The North Face and Timberland outdoor clothing brands - and US-based Altamont Capital Partners have offered $1.10 a share for the business and will undertake due diligence.

The offer matches the one made by the Sycamore consortium led by US-based Billabong executive Paul Naude in December.

Billabong was 1.75 cents lower at 96.25 cents, down from Tuesday's peak of 99.5 cents.

But, building products manufacturer Boral hit an 18-month high after it announced a company-wide restructure involving the loss of 700 jobs.

Its shares had shot up 45 cents, or 10.32 per cent, to $4.81.