Australian shares rose slightly on Friday, taking their cue...

Australian shares rose slightly on Friday, taking their cue from modest gains in European markets and supported by the materials sector thanks to an extended rally in base metals prices.

The S&P/ASX 200 index (xjo) rose 0.3 percent, or 16.62 points, to 5,501.7 by 0108 GMT. The benchmark closed flat on Thursday.

European shares .FTEU3 rose marginally on Thursday, while Wall Street was closed on Thursday for the U.S. Thanksgiving holiday. [MKTS/GLOB]

"The rest of the world is likely to stay in holding pattern till U.S. comes back online next week while EU will get more attention as ECB talks up financial risks," said Mathan Somasundaram, a quantitative strategist with Baillieu Holst, in a note.

Early trading was lit up by mergers and acquisition activity, with Tatts Group Ltd (TTS) soaring as much as 10.9 percent to a 10-month high after Tabcorp Holdings (TAH) said it had purchased control of around 10 percent of the lottery operator for A$638 million ($472.76 million).

The benchmark index got its biggest boost from materials stocks, with BHP Billiton Ltd (BHP) rising as much as 2.1 percent to hit a 15-month high.

BHP said it had approved $181 million to fund remediation and compensation programs at its Samarco iron ore joint venture in Brazil following a deadly dam burst in November 2015.

On Thursday, zinc prices jumped to their highest in more than eight years and copper headed towards its 2016 peak. [MET/L] Dalian iron ore extended its rally to hit a near three-year high, while oil prices were little changed. [IRONORE/] [O/R]

The metals and mining index .AXMM was up about 1 percent. Rio Tinto Ltd (RIO) rose for a fifth consecutive session, to touch its highest since March 2015.

Financials .AXFJ were flat as they took a breather from a five-session winning run.

Australia's No.1 investment bank Macquarie Group Ltd (MQG) and top corporate lender ANZ Banking Group Ltd (ANZ) fell after they offered to pay fines totalling A$15 million ($11.12 million) for "cartel conduct" in Singapore.

New Zealand's benchmark S&P/NZX 50 index (nz50) inched up 0.1 percent to 6,891.66 at 0108 GMT with gains in telecom and industrials tempered by decline in healthcare stocks.

Telecom major Spark New Zealand Ltd (SPK) rose for a sixth straight session, hitting a two-week high.

Index heavyweight Fletcher Building Ltd (FBU) was the top gainer by index points rising as much as 0.9 percent.

Healthcare stocks Fisher & Paykel Healthcare Corp (FPH) and Orion Health Group Ltd (OHE) were among the biggest drags on the index. Orion Health Group fell as much as 2 percent to its lowest in nine months.

($1 = 1.3495 Australian dollars)