Rudd to attend Yunupingu's state funeral

PM Kevin Rudd will be flying to the Northern Territory to pay tribute to Mr Yunupingu. Source: AAP

PRIME Minister Kevin Rudd will be flying to the Northern Territory on Sunday to pay tribute to Mr Yunupingu at his state funeral.

The former lead singer of Yothu Yindi will be remembered at a service at Gulkula in northeast Arnhem Land.

A spokeswoman for Mr Rudd confirmed he would be attending the ceremony and is expected to arrive in the Northern Territory sometime before noon.

Mr Yunupingu, an Aboriginal elder, educator and 1992 Australian of the Year, died aged 56 at his home in the small town of Yirrkala on June 2.

He was the first indigenous person from Arnhem Land to gain a university degree and the Northern Territory's first Aboriginal school principal when he was appointed head of Yirrkala Community School in 1990.

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Ecuador 'seeks Snowden talks with Russia'

ECUADOR has asked the Kremlin for talks over the fate of fugitive US intelligence leaker Edward Snowden, a Russian state-owned broadcaster says.

Snowden, who is believed to be holed up in the transit zone of Moscow's Sheremetyevo airport, has applied for asylum in the South American country.

He flew to Russia from Hong Kong last Sunday.

Foreign Minister Ricardo Patino made the request, Rossiya 24 reported.

Ecuador has said Snowden would need to be on the country's territory to be granted refugee status.

But experts say this could also include the Ecuador embassy in Moscow.

To get there, the US citizen would have to pass through Russian border controls.

US authorities, however, have cancelled Snowden's passport and are demanding his extradition from Russia.

Russian parliamentary foreign affairs committee chairman Alexei Pushkov called the case "tragic".

"The idealist Snowden was apparently convinced that it would be like in a Hollywood movie: he would blow the whistle, and democracy would prevail," he wrote on Twitter. "But life and the US are harder."

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Review of Qld power tariff reforms begins

Electricity reforms in Queensland will be phased in from 2014, the state's energy minister says. Source: AAP

ERGON Energy has begun a review of electricity pricing in Queensland, with tariff reforms due to be phased in from 2014.

Earlier this year the government proposed scrapping uniform tariffs to entice greater competition and merge government-owned retailers Energex and Ergon.

It's hoped the merging would save $580 million over seven years and reduce duplication of infrastructure.

Queensland Energy Minister Mark McArdle announced on Saturday that Ergon Energy had begun a review of power tariffs.

Restructured tariffs will commence in 2014-15, with further tariff reforms to be brought in over the 2015-2020 period.

Mr McArdle also urged Queenslanders and interest groups to get involved with the review.

"It makes sense that we now need to reconsider these tariffs so they better reflect the needs of Queenslanders," he said.

He says reforms will give customers more options and encourage electricity use to off-peak times.

Representatives from Ergon Energy, Energex, the Queensland Competition Authority, Treasury and Mr McArdle's department will provide oversight of the tariff reforms.

The Greens have criticised the absence of a representative from the solar industry in the group.

"Solar is the elephant in the room in the energy debate," a spokesman said.

"They are not making room in the working group for this important new industry player."

Electricity prices will rise by about $260 a year for the average household from Monday under a ruling by the Queensland Competition Authority.

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UK PM makes unannounced Afghan visit

BRITISH Prime Minister David Cameron has made an unannounced visit to Afghanistan, meeting troops in the southern province of Helmand as the NATO military coalition hands responsibility over to local forces.

The British embassy in Kabul confirmed Cameron's trip to Camp Bastion as Britain marked Armed Forces Day on Saturday.

Britain has about 7900 soldiers serving in Afghanistan.

Cameron visited troops on the front line as a senior British commander said talks with the Taliban should have been attempted a decade ago.

General Nick Carter, deputy commander of the NATO-led coalition, told The Guardian that it would have been more successful to approach the Taliban in 2002 after they were knocked from power.

Speaking in Lashkar Gah in Afghanistan, Cameron told Sky News: "I think you can argue about whether the settlement we put in place after 2001 could have been better arranged. Of course you can make that argument. Since I became prime minister in 2010 I have been pushing all the time for a political process and that political process is now under way.

"But at the same time I know that you cannot bank on that, which is why we have built up the Afghan army, built up the Afghan police, supported the Afghan government so after our troops have left, and they will be leaving under the program we have set out, this country shouldn't be a haven for terrorists."

The British prime minister told reporters: "We want a political solution as well as making sure we have a security solution. What we have done in Afghanistan is we came here to stop it being used as a base for terrorist activities. That has been and is successful.

"What we need to do is build up the Afghan armed forces and at the same time make sure that the politics of Afghanistan enable everyone in Afghanistan to play a role in the future of their country.

"We are making some progress there as well."

Cameron announced that funding from bankers' Libor fines would be used to create a permanent memorial to the 444 British personnel killed in Afghanistan.

He said: "I can announce today that we will be taking more money off the Libor fines and putting it in to military charities including building a permanent memorial at the Staffordshire Arboretum so that we can always remember and future generations can remember those that fell and died here in Afghanistan."

Cameron said the political process should mean "those people prepared to give up the bomb, the bullet, can actually be part of that process, part of that future Afghanistan".

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Crowds set to farewell Sydney monorail

Large crowds are expected for the monorail's final lap as Sydney says goodbye to the steel giant. Source: AAP

LARGE crowds are expected to head to Sydney's monorail on Sunday to witness the steel giant's last spin around town.

The Sydney character will take its final ride at 9.30pm on Sunday, after a quarter of a century trundling above people's heads.

Labelled as a "fad" and a "white elephant" by NSW Transport Minister Gladys Berejiklian on Friday, ticket sales have increased leading up to its farewell.

"In the last three weeks we've seen a 15 per cent increase in customers, compared to this time last year," a NSW Transport spokesperson said in a statement on Saturday.

"With the final weekend of monorail operations, along with school holidays, we're expecting very large crowds."

A single loop ticket will be available for those wanting to get a last look at the monorail.

All sales will go to five charities and a ballot will be drawn to select the final people riding the monorail.

Ticket sales will stop at 8.30pm with the final passenger loop to take place from 9.30pm for the ballot winners.

Workers will begin dismantling the monorail, with almost all of its 1500 tonnes of steel and 400 cubic metres of concrete to be recycled.

However, two monorail carriages and 10 metres of the track will be preserved in the Sydney's Powerhouse Museum in the short term.

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Priest held in Vatican bank probe

A SENIOR Catholic cleric has been arrested on suspicion of fraud and corruption in connection with a sweeping probe of the scandal-plagued Vatican bank, Italian media reports say.

Contrary to earlier media reports, the arrested cleric Nunzio Scarano is not a bishop but a priest from Salerno in southern Italy who is called "monsignor" in recognition of his seniority at the Holy See, Vatican senior media adviser Greg Burke said.

Scarano was arrested after an investigation into the Institute for Works of Religion (IOR), as the bank is known, unearthed a suspected international fraud scheme, reports said.

The senior cleric was suspended from his position as a member of the administration that manages the Vatican's assets (the APSA) "about a month ago, after his superiors learnt about an investigation into his activities," Vatican spokesman Federico Lombardi said.

Scarano was arrested along with a former member of the Italian secret services and a financier, reports said.

Police declined to confirm the arrests, saying a press conference would be held later on Friday.

ANSA news agency said the three arrested men were suspected of plotting to illegally move 20 million euros ($A28.29 million) from Switzerland to Italy.

The money allegedly belonged to friends of Scarano and was brought into Italy on board a private jet belonging to Italian former secret service agent Giovanni Maria Zito, the reports said.

Zito purportedly received 400,000 euros for the service.

According to the daily La Repubblica, Scarano is also under investigation by the Salerno prosecutor on suspicion of money laundering.

"They called him Monsignor 500... because of the great number of 500 euro notes he had at his disposition," which he allegedly used to launder money for friends in southern Italy, the newspaper said.

It added that it was an initial investigation into Scarano's bank account at the IOR which led to the discovery of the suspected racket.

In a bid to tighten control of the bank's activities, Pope Francis announced on Wednesday a sweeping study of the bank before a possible clear-out of top management at the Holy See.

In his first real step towards reform, the pontiff is to take a hands-on approach, ensuring that everything a special five-member commission uncovers will be reported directly to him.

Pope Francis, elected amid an in-house debate over whether it is necessary to have a Vatican bank at all, has railed against the cult of money, calling for a "poor Church".

He has also quipped that "St Peter did not have a bank account", and warned the IOR and other Vatican staff that "offices are necessary but they are necessary only up to a certain point".

The IOR, which does not lend money, manages assets of 7 billion euros and handles funds for Vatican departments, Catholic charities and congregations as well as priests and nuns living and working around the world.

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Grounded eagle at home in Sydney zoo

A wedge-tailed eagle that refuses to fly home has baffled keepers at Sydney's Taronga Zoo. Source: AAP

FLYING higher than an eagle is hard without any wind beneath your wings.

Keepers at Taronga Zoo are baffled why a Wedge-tailed eagle found in Victoria's Dandenong Ranges - a species known for its ruthless ability to hunt in the air - doesn't want to take a flight to freedom.

At first they thought it wasn't able to fly, but now it seems the bird just likes hanging around with people.

"It doesn't want to fly away, which is why the vets thought he was unable to," Taronga Zoo's Mark Williams told AAP on Friday.

"We think it's been in contact with people and has become 'imprinted'."

So rather than release the bird into the wild, where it is unlikely to be able to hunt and survive, Taronga Zoo has trained the young male for its bird show.

"We're getting him used to things and taking him for walks in the zoo," said Matt Kettle, Taronga's bird show supervisor.

The Wedge-tail, Australia's largest bird of prey, was found in the suburb of Monbulk.

Vets at the Healesville Sanctuary determined the 12-month-old bird was able to fly but failed to do so when released and was sent to Sydney.

The eagles are known for a wingspan that can reach 2.5 metres, and can fly up to 2000m above the ground using thermal air currents.

Their advanced eyesight also enables them to accurately spot and capture their prey, with special bony rings around their eyes that squeeze the eyeball like a telephoto lens.

Wedge-tailed eagles are also known to confront hang-gliders who are in their territory - a scenario that at least for now seems unlikely for this feathered friend.

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Gillard's legacy will shine: Mathieson

Tim Mathieson (R) says it was a shock witnessing the overthrow of his partner Julia Gillard. Source: AAP

JULIA Gillard's long-time partner believes the former prime minister's three years in office will be remembered fondly - in time.

Tim Mathieson said it was "a bit of a shock" witnessing the overthrow of his partner on Wednesday night while watching the rugby league State of Origin match with his children.

But he said he and Ms Gillard were "all good" and that life moves on.

"She's really good, a little sad, the household is sad but probably slightly relieved as well," he told the Nine Network while out walking the couple's dog Reuben.

Mr Mathieson said Ms Gillard had many great achievements during her time in office and he hoped Prime Minister Kevin Rudd gave Opposition Leader Tony Abbott a run for his money.

"She's done some incredible things which I'm sure in time will be shown in much better light than has been lately," he said.

"It's time to move on and I wish Kevin all the best as well and hope that he gets out there and gives Tony a really good run for his money."

Aside from enjoying living in The Lodge and Kirribilli House, Mr Mathieson says he's had some amazing experiences as the prime minister's partner.

"It's been an amazing three years personally for me, having gone to the royal wedding and met the Queen in Buckingham Palace, gone to Washington (to) meet the Obamas, gone to China, that sort of stuff," he said.

And for the first time in three years, Mr Mathieson said he and Ms Gillard would have a quiet "kick-back" on the weekend and not pick up a paper.

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European stocks fall after strong gains

EUROPEAN stock markets have fallen, as traders banked profits from the week's strong gains.

The gains came in response to positive US economic data and signs that the world's biggest economy may take time to wind down its stimulus program, analysts said.

Gold prices dropped under $1,200 an ounce for the first time for nearly three years.

On stock markets, London's FTSE 100 index of leading shares dipped 0.12 per cent to stand at 6,235.66 points approaching midday in the British capital.

Frankfurt's DAX 30 fell 0.18 per cent to 7,976.19 points and in Paris the CAC 40 shed 0.59 per cent to 3,740.13 compared with Thursday's closing values.

Madrid's main index lost 0.82 per cent and Milan gave up 0.98 per cent.

"European markets seems to have been completely absent from global macro themes of late, complacent to tow the line of whatever is going on in the US and Asia," said Jonathan Sudaria, a dealer at Capital Spreads.

Asian stock markets mostly rose on Friday after a US Federal Reserve official moved to soothe fears the bank would wind up its stimulus program too soon. But concerns over a weaker Chinese economy lingered, traders said.

In Tokyo, Japan's Nikkei index led the gains as the dollar edged back towards the 100 yen mark, helped by a better-than-expected batch of economic data.

In later London foreign exchange deals, the euro rose to $1.3050 from $1.3038 late in New York on Thursday.

The dollar grew to 98.93 yen from 98.35 yen on Thursday.

On the London Bullion Market, the price of gold dropped to $1,180.50 an ounce - the lowest point since August 2010. It later recovered to stand at $1,202.93 an ounce from $1,232.75 on Thursday.

Meanwhile official economic data Friday showed German consumers had returned to the shops in May, exceeding analysts' forecasts who had reckoned on a fourth monthly drop in retail sales in Europe's biggest economy.

Retail sales rose by 0.8 per cent in May from the level in April, according to provisional adjusted figures by the federal statistics office Destatis.

Economists polled by Dow Jones Newswires had forecast an average 0.3-per cent drop, on the heels of declines in the three previous months.

"The primary indicator of consumer spending in the eurozone's biggest economy provided quite a bright picture of German consumers' activity," said Gekko Markets trader Anita Paluch.

"It should not be surprising though; the strong labour market, low unemployment and rising wages buoy consumer confidence and make a promising statement for the future," she added.

France, the eurozone's second-biggest economy, said on Friday that its national debt rose to 91.7 per cent of annual output in the first quarter of this year, amid rising concern about French public finances.

At the end of last year, the debt amounted to 90.2 per cent of gross domestic product.

European Union rules require the public debt to be no more than 60 per cent of output or falling towards this ratio.

In company activity, shares in ailing French auto group PSA Peugeot Citroen fell sharply amid reports, and a denial, that the US group General Motors could take control and inject cash.

PSA shares were showing a fall at midday of 2.54 per cent to 6.34 euros. On Thursday the shares had jumped 5.47 per cent in an initial response to a report that GM could take control.

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Dinosaurs 'crawled Like toddlers'

DINOSAURS crawled on all fours like toddlers before switching to two feet when they grew up, experts have discovered.

Analysis of bones 100 million years old showed baby Psittacosaurus had long arms and short legs, which were used to scuttle around shortly after hatching.

The arms grew quickly between the ages of one and three, suggesting that the Psittacosaurus continued to move on all fours during their 'toddler' years.

But aged four, Psittacosaurus - known as the 'parrot dinosaur' - experienced a massive growth spurt in their legs, while the development of their arms slowed.

This meant legs grew to twice the size of arms - causing the dinosaurs to spend their adult life on two feet.

Palaeontologists from Beijing, Bristol and Bonn discovered the differences in limb growth through a combination of biomechanical analysis and bone histology.

Qi Zhao, from the Institute for Vertebrate Palaeontology in Beijing, carried out the intricate study on bones of babies, juveniles and adults.

Dr Zhao, who conducted the research as part of his PhD thesis at the University of Bristol, said: "Some of the bones from baby Psittacosaurus were only a few millimetres across, so I had to handle them extremely carefully to be able to make useful bone sections.

"I also had to be sure to cause as little damage to these valuable specimens as possible."

There are more than 1,000 specimens of Psittacosaurus from the Cretaceous period of China and other parts of east Asia, around 100 million years ago.

Dr Zhao sought special permission from the Beijing Institute to section two arm and two leg bones from 16 individual dinosaurs, aged from less than one year to 10 years old, or fully grown.

He carried out intricate sectioning work in a special palaeohistology laboratory in Bonn in Germany.

The one-year-olds had long arms and short legs and scuttled about on all fours soon after hatching.

Bone sections showed that the arm bones grew fastest when the dinosaurs were aged between one and three.

From four to six years, arm growth slowed down and the leg bones showed a massive growth spurt, meaning they ended up twice as long as the arms.

Professor Xing Xu of the Beijing Institute, who supervised Dr Zhao's thesis, said: "This remarkable study, the first of its kind, shows how much information is locked in the bones of dinosaurs.

"We are delighted the study worked so well, and see many ways to use the new methods to understand even more about the astonishing lives of the dinosaurs."

Professor Mike Benton, of the University of Bristol, who also supervised Dr Zhao's PhD, said: "These kinds of studies can also throw light on the evolution of a dinosaur like Psittacosaurus.

"Having four-legged babies and juveniles suggests that at some time in their ancestry, both juveniles and adults were also four-legged, and Psittacosaurus and dinosaurs in general became secondarily bipedal."

The paper, 'Histology and postural change during the growth of the ceratopsian dinosaur Psittacosaurus lujiatunensis', is published on Friday in Nature Communications.

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Mandela 'very critical', says daughter

NELSON Mandela's condition is "very critical" and "anything is imminent", his daughter Makaziwe Mandela says.

"I can reiterate that Tata (father) is very critical, that anything is imminent, but I want to emphasise again that it is only God who knows when the time to go is," she told broadcaster SAFM on Thursday.

"I won't lie. It doesn't look good," she said. But "if we speak to him he responds and tries to open his eyes - he's still there."

Clan elder Napilisi Mandela told AFP that the former South African president "is using machines to breathe".

"It is bad, but what can we do," said Napilisi Mandela, who usually presides over family rituals and meetings.

The Nobel Peace Prize winner's health has deteriorated in recent days, prompting President Jacob Zuma late on Wednesday to pull out of a trip to neighbouring Mozambique - the first time he has scrapped a public engagement since Mandela was hospitalised on June 8.

"President Zuma was briefed by the doctors who are still doing everything they can to ensure his well-being," a statement from the presidency said.

On Thursday a large number of family members gathered at the Mediclinic Heart Hospital, along with the minister of defence, who is responsible for Mandela's treatment. Zuma was also seen returning to the facility.

A few family members walked to the wall of messages and flowers where emotional crowds have been holding vigils, offering their prayers for one of the greatest figures of the 20th century.

With his life seemingly slipping away, messages of support for the former president blanket the wall, including a poster bearing one of his most memorable quotes: "It only seems impossible until it's done".

Meanwhile messages of goodwill flooded in from overseas.

UN leader Ban Ki-moon said the whole world was praying for "one of the giants of the 20th century".

"I know our thoughts and prayers are with Nelson Mandela, his family and loved ones, all South Africans and people across the world who have been inspired by his remarkable life and example," Ban said.

Hillary Clinton offered "love and prayers to our great friend, Madiba, his family and his nation during this difficult time".

The White House has also sent its wishes but could not yet say whether his ill health would affect a planned visit by US President Barack Obama to South Africa from Friday as part of a tour of Africa.

Mandela's fragile state of health has sparked speculation that the tour could be halted, or radically changed, if the anti-apartheid icon passes away while Obama is on the continent.

South Africa's foreign minister Maite Nkoana Mashabane has said that while Obama would have loved to see Mandela, a meeting with the former South African leader would be impossible.

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Nigella seen moving her stuff out

SINCE the now infamous paparazzi shots of art collector Charles Saatchi clutching Domestic Goddess Nigella Lawson's throat surfaced, Lawson seems to have moved on.

Lawson, who has previously described her husband as "the exploder", has kept her silence on this occasion, but her actions have spoken louder than words.

She reportedly left the family house with her two children and has been staying at a rented flat in Mayfair. And now there are a stream of images revealing removal vans clearing her belongings, including her cookbooks and blender, from the couple's STG12 million ($A19.94 million) Chelsea home.

She was pictured outside the flat without her wedding ring, while a bulging case of clothes was dropped off at the weekend. There are also reports that she's keen to get to Los Angeles ahead of starting work on her television show The Taste.

Perhaps the only positive thing to come out of the Saatchi and Lawson affair is that it's turned a much-needed spotlight on the issue of domestic violence.

Meanwhile, everyone has had their two cents' worth in the meantime. The incident, which Saatchi initially dismissed as nothing more than "a playful tiff" before accepting a police caution for assault, sparked a media and Twitter storm - and even politicians have got involved.

British Deputy Prime Minister Nick Clegg said on his phone-in radio show that it may have been a "fleeting thing", while Labour leader Ed Miliband said the pictures were "horrifying" and he'd have intervened if he'd been there.

More pictures have now emerged, showing Saatchi apparently picking his wife's nose. He said: "Even domestic goddesses sometimes have a bit of snot in their nose. I was trying to fish it out."

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European shares mixed after strong gains

EUROPEAN stock markets traded have been mixed after two days of strong gains, as traders digested news of an unexpected drop in German unemployment and rising Italian bond yields.

London's FTSE 100 index of leading shares rose 0.19 per cent to stand at 6,176.90 points in midday deals.

Frankfurt's DAX 30 was flat at 7,939.83 points and in Paris the CAC 40 dipped 0.11 per cent at 3,721.77.

Madrid's main index slumped 0.99 per cent and Milan lost 0.17 per cent.

European equities had on Wednesday rallied for a second day in the wake of positive US economic data.

"A steady session for European markets (Thursday) thanks to a better than expected German unemployment report which instilled some confidence," said Ishaq Siddiqi, market strategist at ETX Capital traders.

"The euro gained some momentum versus the US dollar following the German jobs data which showed jobless claims form the country unexpectedly dropped last month after three straight months of increases," he added.

German unemployment registered a surprising fall in June when the labour market in Europe's biggest economy proved robust, official data showed on Thursday while many EU countries battle lengthening jobless queues.

The unemployment rate stood at 6.8 per cent this month in seasonally-adjusted terms, according to monthly figures compiled by the Federal Labour Office.

Elsewhere, Italy's borrowing costs edged up at an auction of medium and long-term bonds on Thursday, but rose less than expected, following an easing in investor fears over the Federal Reserve's plans to wind down its stimulus program.

In London, official data revealed that Britain's economy expanded by 0.3 per cent in the first quarter of 2013, and never experienced a double-dip recession as previously thought.

In foreign exchange trading, the euro rose to $1.3029 from $1.3012 late in New York on Wednesday.

The dollar grew to 98.03 yen from 97.72 yen on Wednesday.

On the London Bullion Market, the price of gold edged up to $1,236.35 an ounce from $1,236.25. The precious metal had struck the lowest point for nearly three years on Wednesday, at $1.221.99 an ounce, before recovering.

The US Commerce Department on Wednesday slashed its estimate for first-quarter growth in the world's biggest economy from 2.4 per cent to 1.8 per cent.

The data raised the prospect that the Fed will sit tight on winding down its bond-buying scheme, known as quantitative easing (QE), as it waits for the economy to show more signs of strength.

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Obama says Mandela a 'hero for the world'

US President Barack Obama said that Nelson Mandela was a "hero for the world" whose legacy will live on throughout the ages, as the anti-apartheid hero lay critically ill in hospital.

"He is a personal hero. I think he is a hero for the world, and if and when he passes from this place, one thing I think we all know is that his legacy is one that will linger on throughout the ages," Obama said in Senegal.

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Keneally won't contest Garrett's seat

Former NSW premier Kristina Keneally has ruled out contesting the federal seat of Kingsford Smith. Source: AAP

FORMER NSW premier Kristina Keneally says she won't stand as a candidate to replace Peter Garrett in his federal seat of Kingsford Smith.

Ms Keneally, now CEO of Basketball Australia, has moved to quickly extinguish speculation that she may put her hand up for federal parliament.

Mr Garrett on Wednesday night stood down as schools minister and announced he would retire at the upcoming federal election after Kevin Rudd beat Julia Gillard in a leadership ballot.

After she lost the NSW election in 2011, Ms Keneally had been rumoured to be planning a post-election move to Canberra via the seat of Kingsford Smith, where she lives.

She rejected the suggestion at the time, and has again on Thursday, saying she'd prefer to spend time with her family and working as CEO of Basketball Australia.

"I asked a great deal of Ben and my sons during my time in politics. Now I have a job that allows me time to be a wife and mother, too, and I value that very much," she said in a statement.

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Hong Kong stocks close 2.43% higher

HONG Kong shares have finished 2.43 per cent higher as traders welcomed a move by China's central bank to ease a liquidity crisis that has hit the country's financial markets.

The benchmark Hang Seng Index on Wednesday rose 482.83 points to 20,338.55 on turnover of $HK78.84 billion ($A11.04 billion).

Global markets tumbled this week as China's lenders have been hit by a credit squeeze that fuelled concerns for its wider economy.

But traders breathed a sigh of relief after the People's Bank of China (PBoC) late on Tuesday said it had made money available to some firms in a bid to prevent a cash crunch that had sent shares into a tailspin.

The announcement came just a day after it said it was ruling out providing fresh cash and ordered banks to put their financial houses in order.

Hong Kong-listed China bank shares rebounded after a recent heavy sell-off, while shares were also boosted by a rally in US stocks.

Mid-sized mainland lender China Minsheng rose 6.4 per cent to $HK7.90 after the bank's management assured investors about the strength of its liquidity position.

The bank's shares are "not for the faint of heart, but we see reward outweighing risk at this level", investment banking firm Jefferies said in a note to clients.

Meanwhile shares in the Industrial and Commercial Bank of China (ICBC) in Hong Kong jumped 6.8 per cent to $HK4.70 and China Construction Bank rose 6.5 per cent to $HK5.41.

"Hong Kong is always this difficult place, sandwiched between China and the US," said Jiong Shao, China strategist for Macquarie Securities.

Chinese shares closed down 0.41 per cent as traders remain nervous.

The benchmark Shanghai Composite Index fell 8.01 points to 1,951.50 on turnover of 80.9 billion yuan ($A14.33 billion), marking the lowest close since January 15, 2009.

"Investors are worried about financial risks if more problems pop up in the banking system," Capital Securities analyst Jacky Zhang told Dow Jones Newswires.

Banking stocks were mixed. Bank of Communication dropped 1.72 per cent to 3.99 yuan and China Minsheng Bank fell 1.66 per cent to 8.30 yuan. But ICBC rose 0.54 per cent to 3.74 yuan.

China Shenhua Energy lost 3.03 per cent to 16.99 yuan, China Coal Energy dropped 2.37 per cent to 4.94 yuan and Yanzhou Coal Mining fell 1.86 per cent to 9.51 yuan.

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Markets to take PM change in their stride

THE federal Labor leadership change to Kevin Rudd is unlikely have a material impact on Australian financial markets.

Mr Rudd won a caucus ballot against former prime minister Julia Gillard on Wednesday 57 to 45 votes.

RBC Capital Markets head of strategy Su-Lin Ong said the markets generally dislike uncertainty.

"But the political situation in Australia has been fluid for a few years now and tonight's events are unlikely to have a material impact on the currency or bond markets," she said in a note to clients.

Ms Gillard has run a minority government since late 2010 when she sealed a deal with the help of the Australian Greens and independent MPs.

However, the opinion polls point to a landslide win for the Tony Abbott-led Liberal-National coalition at this year's federal election.

TD Securities head of Asia-Pacific research Annette Beacher believes the switch back to Mr Rudd - who was toppled by Ms Gillard in June 2010 - may save a few Labor seats at the election but probably won't save the government.

"We believe a decisive change of government is positive for business and consumer confidence," she said.

"The coalition are on the record to 'responsibly' lower deficits and debts, while a strong majority government, in our view, could boost investment and employment as policy certainty and leadership are restored."

Business groups were quick to congratulate Mr Rudd on his return as prime minister.

Australian Industry Group chief executive Innes Willox said the ballot put to rest the leadership distraction which has added to the political uncertainty and weighed on both the community and economy.

"We have had a long and positive working relationship with Mr Rudd and business will be deeply interested in his policy approaches ahead of the election," Mr Willox said in a statement.

He said any government faces significant challenges, particularly around workplace relations, carbon, immigration, skills, infrastructure, and Research and Development.

"A big priority for any government should be to boost our productivity and reduce costs and regulation for business," he said.

He also offered his thanks to Ms Gillard for the enormous contribution she has made during her career including most recently for her strong support for the manufacturing sector and passion to deliver reforms in the education and training space.

ANZ economists Ivan Colhoun and Cherelle Murphy said Mr Rudd was not obliged to hold the election on September 14.

"An earlier election may lift business and consumer confidence, which appears to have been weighed down by political uncertainty," they said in a client note.

They agreed that while the political implications from the ballot are extensive, there should be little if any financial market or economic impact.

The Australian dollar received a modest lift after the result of the ballot, nudging above 93 US cents.

Chief executive at accountants CPA Australia, Alex Malley, did not believe the change of leadership would restore the confidence and respect of Australian business.

He said it was merely the next chapter in what has been a three-year malaise.

"An election without delay is the only way to put an end to these indulgent political games which continue to take the community for granted," Mr Malley said in a statement.

"Effective decision making will only come from a government - Labor or coalition - that has a clear mandate."

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Rudd wins ALP leadership vote

KEVIN Rudd has exacted revenge on Julia Gillard, toppling her in a Labor Party coup to resume the prime ministership she took off him three years ago.

Ms Gillard fulfilled her vow to retire from politics if she lost the caucus poll which Mr Rudd won 57 votes to 45 and was quickly followed on Wednesday night by some of her strongest supporters.

Craig Emerson and Peter Garrett both announced their retirements from politics, while Greg Combet and Joe Ludwig resigned from the cabinet.

Wayne Swan stepped down as deputy leader and was replaced by Anthony Albanese who fought off a challenge from Simon Crean, 61 votes to 38, but said he would remain in politics.

After weeks of speculation reached a head on Wednesday afternoon, Ms Gillard called for a 7.00pm leadership ballot confident she had the numbers.

But her fate seemed sealed when senior minister Bill Shorten, who helped her depose Mr Rudd in 2010, announced 15 minutes before the caucus meeting that he had switched his support to Mr Rudd.

Mr Rudd will now lead the government into an election the polls say it has no hope of winning but which Ms Gillard urged her colleagues to fight out to the end.

"Don't lack the guts, don't lack the fortitude, don't lack the resilience to go out there with our Labor agenda and to win this election," she said.

"I know that it can be done."

Ms Gillard congratulated Mr Rudd on his election.

She said she was humbled by having had the privilege to be prime minister, and Australia's first female prime minister.

"When I first put myself forward for consideration as Labor leader in 2010 I had the overwhelming support of my colleagues to do so. I thank them for that," she said.

"And I thank them for giving the opportunity to me not only to serve the nation but to serve as the first female prime minister of this country."

Ms Gillard said she had faced the "twin problems" of a minority parliament and "internal division" within Labor.

"It has not been an easy environment to work in."

Ms Gillard said there had been a lot of talk about her playing the "gender card".

"The reaction to being the first female prime minister does not explain everything about my prime ministership, nor does it explain nothing about my prime ministership," she said.

"It explains some things and it is for the nation to think in a sophisticated way about those shades of grey.

"What I am absolutely confident of is it will be easier for the next woman and the woman after that ... and I am proud of that."

Mr Swan, who has been a fierce critic of newly re-elected Labor leader Kevin Rudd, confirmed he will recontest his Queensland seat of Lilley and paid tribute to Ms Gillard.

"She is one of the toughest warriors that has ever led the Labor Party," he said.

Labor whip Chris Hayes said Mr Rudd and Ms Gillard both spoke before the caucus vote.

"The mood was quite sombre," he said.

"Most people are happy that the issue of the leadership is now put behind us so the party can now concentrate on preparing for the September election."

Senator Penny Wong unanimously won the ballot for Leader of the Senate, taking over from Stephen Conroy.

Jacinta Collins becomes the senate deputy leader.

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Riots in China's Xinjiang region kill 27

RIOTS in China's ethnically divided Xinjiang region have left 27 people dead, according to state media which said police opened fire on 'knife-wielding mobs'.

The violence is the latest to hit the troubled western region, which is about twice the size of Turkey and home to around 10 million members of the mostly Muslim Uighur ethnic minority.

Police shot at 'mobs' who had attacked police stations, a local government building and a construction site, the Xinhua news agency said on Wednesday, citing local officials.

"Seventeen people had been killed... before police opened fire and shot dead 10 rioters," it said. The mobs were also "stabbing at people and setting fire to police cars."

Nine police or security guards and eight civilians were killed before police opened fire, the report said, adding that three other people were taken to hospital with injuries.

The clashes occurred early Wednesday in the Lukqun township of Shanshan County, about 100 kilometres from the desert city of Turpan and about 250 kilometres from the regional capital Urumqi.

The reason for the violence was not immediately clear, and police in Turpan refused to comment when contacted by AFP.

Many of Xinjiang's Uighur community complain of religious and cultural repression by Chinese authorities, and the region is regularly hit by unrest.

China reported that 21 people died in clashes between police and locals in the region in April, which the government said were caused by 'terrorists', and a court in Xinjiang recently jailed nine people 'for religious extremism'.

Uighur rights groups have dismissed the claims of terrorism, citing economic inequality and religious repression as causes of unrest.

The region's worst ethnic violence in recent years occurred in July 2009, when riots involving Uighurs and settlers from China's Han ethnic majority killed around 200 people in Urumqi.

Those clashes led to a major security push in the region, which rights groups have said resulted in intense monitoring of Uighurs by security forces.

A specialised anti-terrorism unit of the People's Liberation Army carried out drills in April, according to a previous report by the PLA Daily.

The region saw more than half of China's trials for the charge of 'endangering state security' last year, but is home to less than two per cent of the country's population, suggesting 'ethnic discrimination', the US-based Dui Hua Foundation advocacy group said.

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European shares rally for second day

EUROPE'S main stock markets have rallied further in the wake of positive US economic data, but gold prices have hit fresh low points amid concern over a Chinese credit crunch.

London's FTSE 100 index of leading shares on Wednesday rose 1.05 per cent to stand at 6,166.01 points in late morning deals. Frankfurt's DAX 30 index grew 1.58 per cent to 7,934.99 points and in Paris the CAC 40 jumped 1.89 per cent to 3,718.79.

Madrid's main index surged 2.36 per cent and Milan advanced by 1.97 per cent in value.

The Bank of Spain said on Wednesday that Spain's job-destroying recession was set to ease in the second quarter of 2013, adding its voice to an optimistic chorus emerging from the government.

"Investor sentiment has received a big boost from the strong figures out of the US," said Craig Erlam, market analyst at Alpari traders.

In foreign exchange trading, the European single currency fell to $US1.3038 from $US1.3083 in New York late on Tuesday.

The US dollar slipped to Y97.56 from Y97.80 on Tuesday.

On the London Bullion Market, the price of gold dropped to $US1,224.18 an ounce - the lowest point since August 2010 - and compared with $US1,279 late on Tuesday.

"Despite the improved mood amongst equity traders ... mining stocks remain under pressure, with metals prices taking another hammering," said Matt Basi, head of UK Sales trading at CMC Markets.

Government bonds also remained firmly in focus as Italy's borrowing costs rose sharply on Wednesday, reflecting fresh unease on the debt market at an auction which raised 8 billion euros ($A11.39 billion) in six-month issues.

Rates almost doubled, rising to 1.052 per cent from 0.538 per cent at the last similar operation on May 29, while demand was down, according to the Bank of Italy.

It was the highest rate for six-month bonds to be paid since February, Dow Jones Newswires said, and followed a disappointing bond sale with raised interest rates on Tuesday.

The results increase pressure on Prime Minister Enrico Letta's government as it bids to push through new measures to boost growth in the recession-hit government.

European stock markets though were recovering after last week reeling as the US Federal Reserve indicated that it would soon begin to wind up its stimulus - and as China's lenders were hit by a credit squeeze.

Traders meanwhile breathed a sigh of relief after the People's Bank of China (PBoC) late on Tuesday said it had made money available to some firms to prevent a cash crunch.

And in New York, sentiment won a lift from data showing more strength and confidence in the US economy.

Figures published on Tuesday showed that new orders for durable goods surged 3.6 per cent in May on the back of aircraft sales, while house prices rose a huge 2.5 per cent in one month. In addition, the Conference Board's consumer confidence index jumped to 81.4, up from 74.3 in May.

"There was a concern yesterday that if the data came out above expectations, or significantly above as it did, that it would push equities back into the red as investors continue to worry about Fed tapering later this year," said Erlam.

"Instead, equities held on to gains which was very encouraging and suggests that markets have priced in the tapering."

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More needed to protect cruise passengers

AS more Australians take holiday cruises both the government and cruise operators need to do more to protect passengers, a parliamentary committee says.

In a report tabled in parliament on Monday, the standing committee on social policy and legal affairs said the industry was growing with 700,000 Australians taking a cruise last year, a fivefold increase in a decade.

The committee said most passengers would expect the cruising environment to reflect Australian social and legal standards, as cruise operators run Australian companies and sail from Australian ports.

But when it comes to crimes committed at sea and regulation of cruise liners, complex questions of jurisdiction underlie almost every aspect of the cruising industry, it said.

Many cruise liners sail under flags of convenience from nations such as Bermuda, Panama, Malta and the Bahamas.

Because of the complexity of the international law, the committee sought its own legal advice which made clear the significant limits on Australia's ability to legislate for the cruising industry.

The problems were highlighted by the case of Dianne Brimble who died of a drug overdose aboard a P&O cruise liner in September 2002. There were many questions raised about the ship's party culture, preservation of the crime scene, the investigation process and the support to Mrs Brimble's family.

The committee said the government should consider how it might better protect people on cruises.

It must do more to ensure passengers understand that cruising is international travel and they should exercise the same precautions they would take on any international journey.

It should press the International Maritime Organisation for more measures to improve passenger safety including real time monitoring of closed circuit TV, installation of man-overboard alarms and a code for responsible service of alcohol.

The government should also conduct a comprehensive review of cruise operator liability for tickets purchased in Australia.

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Homelessness definition broadened

THE definition of homelessness will be broadened under draft laws passed by parliament's lower house.

People staying in crisis accommodation will be regarded as homeless under bills that passed the House of Representatives on Monday.

The new definition also stipulates that safety must be recognised as a vital element in how people live.

Some people may be homeless because they have no safe place to live, even if they have a usual address.

The measures also make it easier for homeless people who don't live in any particular electorate to vote.

The Homelessness Bill 2013 and the Homelessness (Consequential Amendments) Bill 2013 now go before the Senate.

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Snowden set to fly out of Russia

The United States is demanding Edward Snowden should "not be allowed to proceed further" overseas. Source: AAP

US intelligence leaker Edward Snowden is set to fly out of Russia to seek asylum in Ecuador, as Washington demands Moscow hand over the fugitive to face espionage charges at home.

Snowden dramatically slipped out of Hong Kong on an Aeroflot flight on Sunday and is said by Russian officials to have spent the night in a Moscow airport awaiting his onward connection.

The IT contractor, the target of a US arrest warrant issued on Friday after he leaked details of massive US cyber-espionage programs to the media, was reportedly booked on a flight to Cuba on Monday from where he could travel on to South America.

He and his accompanying party, Sarah Harrison, a British national working on the WikiLeaks legal team, were checked in on the flight SU 150 to Havana due to depart on time, according to an AFP correspondent who saw the flight roster.

Russian security sources said they had no reason to arrest the former National Security Agency (NSA) contractor, who officials described as an ordinary "transit passenger" who had not crossed the border.

The United States urged Russia to hand over the fugitive but President Vladimir Putin's spokesman declined to comment on Snowden's transit through Moscow.

"I don't have any information on Snowden," spokesman Dmitry Peskov told AFP.

According to Russian state media, Snowden had spent the night in the distinctly unglamorous "capsule hotel" Vozdushny Express located inside the departures area of Moscow's Sheremetyevo airport.

He was not seen in public after the plane landed, prompting speculation he had been whisked away direct from the tarmac by Russian security.

Ecuador Foreign Minister Ricardo Patino confirmed that the leftist Latin American country, whose embassy in London is already sheltering WikiLeaks founder Julian Assange, was analysing Snowden's asylum request.

"We will make a decision... we are analysing it," Patino told reporters Monday in Hanoi when asked about the high-profile asylum request. "We know he is in Moscow, we're in talks with higher authorities."

Ecuador's outspoken leftist President Rafael Correa has championed the cause of Assange and his allies to the fury of the United States.

A crowd of Russian and foreign journalists, including from AFP, were at the Moscow airport departures lounge and were set to accompany Snowden on the flight to Cuba.

An airport official said that "special procedures" would be enforced for those boarding the plane. She did not explain. Some reporters complained that airport officials had threatened to take away their phones.

State television said several Ecuadorian diplomats were seen going inside the airport hotel on Sunday evening and had stayed there about 30 minutes.

The Ecuadorean ambassador Patricio Chavez stayed in the airport until after midnight, when he left in the embassy car refusing any comment to waiting reporters.

Part of the flight to Havana will pass through oceanic airspace that is controlled by New York air traffic centre, a source told ITAR-TASS news agency, though it was not clear whether US authorities would be able to somehow ground the plane.

The US State Department has revoked Snowden's passport and asked other countries to prevent him from travelling. But a source in Russia's security agencies told Interfax that Snowden could travel without a passport.

"Ecuador authorities could supply him with refugee documents or even grant him citizenship by issuing a passport or a special note," the source said.

The New York Times quoted Assange as saying his group had arranged for Snowden to travel via a "special refugee travel document" issued by Ecuador last Monday.

Snowden abandoned his high-paying job in Hawaii and went to Hong Kong on May 20 to begin issuing a series of leaks on the NSA gathering of phone call logs and Internet data, triggering concern from governments around the world.

Hong Kong said it had informed Washington of Snowden's exit after determining that the documents provided by the US government did not fully comply with Hong Kong legal requirements.

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Egypt PM condemns killing of four Shi'ites

EGYPT'S Prime Minister Hesham Qandil has condemned the "heinous" attack against Shi'ites in a village south of Cairo which left four dead and several injured, the cabinet said in a statement.

Qandil "strongly condemns the ugly incident ... which resulted in the death of four Egyptian citizens," the cabinet said on Monday.

"This heinous crime is incompatible with the principles and teachings of all heavenly religions, and contrary to the nature of religious tolerance in Egypt," he said.

On Sunday, four Egyptian Shi'ite Muslims were killed when they were attacked by a hostile mob in the village of Abu Mussalem in the Giza province.

A house where the minority Shi'ites were meeting was surrounded by residents who told them to get out.

When they refused, a crowd of several hundred people stormed the building and killed four Shi'ites and injured several others.

The attack comes following weeks of toxic anti-Shi'ite rhetoric in the media and from Sunni Islamist leaders.

Qandil expressed his "categorical rejection of hate speech and incitement to violence" and said investigations were underway and that those responsible would be held accountable.

He said authorities would "ensure that the perpetrators be brought to justice to serve as an example to deter anyone thinking of tampering with the fabric of society".

Shi'ites are estimated as a tiny fraction of Egypt's population of 84 million, most of them Sunni Muslim. Shiism is dominant in Iraq and Iran, a regional rival to Egypt, and the conservative Gulf monarchies.

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UK man arrested over French Alps murders

BRITISH police say they have arrested a 54-year-old man in connection with the murders of three members of an Iraqi-British family and a French cyclist in a secluded car park in the French Alps.

The man was detained in a "pre-planned arrest" in Surrey, outside London, where the al-Hilli family lived, a police statement said.

Saad and Ikbal Al-Hilli, Ikbal Al-Hilli's mother Suhaila al-Allaf, and Sylvain Mollier, were murdered on a remote mountain road near Annecy.

Surrey Police said the suspect, who they did not name, was detained on suspicion of conspiracy to commit murder. He was held at an address in Chessington around 7.30am "and is currently in police custody where he will be interviewed".

Saad Al-Hilli's brother Zaid Hilli, who is in his 50s and lives in Surrey, has previously denied any feud with his sibling over an inheritance.

The Al-Hillis' four-year-old daughter Zeena lay undiscovered under her mother's corpse in their BMW for eight hours after the shooting, while her seven-year-old sister Zainab was found with serious injures after being shot and beaten.

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Snowden may be to Caracas via Moscow

FORMER US intelligence operative Edward Snowden Edward Snowden will head to Caracas via Havana after he arrives in Moscow on Sunday, Russian media reports, quoting sources at Aeroflot airline.

"A passenger under that name will arrive in Moscow from Hong Kong today on flight SU213, and tomorrow, on June 24, he will fly to Havana on flight SU150," the state news agency ITAR-Tass quoted a source at the airline as saying.

"Also tomorrow, he will go to Caracas from Havana on a local flight."

In a post on its Twitter feed, WikiLeaks said Snowden was "accompanied by WikiLeaks legal advisers" on his flight from Hong Kong, which had refused to act on a US arrest warrant for the former contractor.

A source working for Aeroflot was quoted by Russian media as saying Snowden was flying together with Sarah Harrison - a WikiLeaks employee.

Police at the airport where Snowden was expected to land told the Interfax news agency they did not plan to detain the former US operative.

"We have not received any instructions regarding this person, however he would need a valid visa to get onto the territory of Russia," a police representative was quoted as saying.

The Russian foreign ministry said it was monitoring the situation.

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Man dies after car smashes into tree

How one text at the wheel can kill

SIGN THE PLEDGE: Trivial text messages sent or read by drivers have claimed at least 20 lives on the nation's roads and left many more injured.

Dockers too classy for Kangaroos

NORTH Melbourne's failed campaign will be remembered for coughing up leads, but the Roos barely got out of the gates against Fremantle.

Chinese embassy under scrutiny

EXCLUSIVE photos have seen China accused of employing "third world" building standards at its top-secret embassy site in Canberra.

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Giant panda gives birth to twins in China

A panda named Haizi at the Wolong Nature Reserve in China has given birth to twins. Source: AAP

A RARE giant panda has given birth to twins in China, the first pair of the endangered species born in the world this year, conservation workers say.

They were born to a panda named Haizi at the Wolong Nature Reserve in China's southwest Sichuan province on Saturday evening, according to the Xinhua news agency.

The first cub arrived at 4:54pm (1954 AEST) and the second 10 minutes later, said workers at the China Conservation and Research Centre for the Giant Panda on the reserve.

The mother is still holding the first cub in her arms so staff have been unable to weigh it or determine its gender.

But they said it should be healthy, given its size and the sounds it has been making.

The second cub is a female and weighs 79.2 grams, the staff said, according to Xinhua.

Haizi became pregnant after mating with males Bai Yang and Yi Bao in March - most giant pandas are not good breeders when in captivity.

Fewer than 1,600 pandas remain in the wild, mainly in Sichuan, with around 300 in captivity around the world, the majority in China.

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N Korean city wins World Heritage status

ROYAL tombs, fortress walls and a 700-year-old school in North Korea's medieval city of Kaesong were among a dozen monuments granted World Heritage status by UNESCO at its annual meeting.

Twelve sites in the city, the heart of the Koryo dynasty which unified the Korean peninsula for the first time, were classified on the grounds of embodying "the political, cultural, philosophical and spiritual values" of the kingdom, UNESCO said.

The Kaesong monuments - including sections of defensive walls - have survived repeated assaults on the city, which served as the seat of the Koryo kings who ruled from 918-1392.

They are located several kilometres from an industrial park jointly run by the divided North and South which has been closed since April after a tensions between the bitter enemies reached boiling point.

Hailing Kaesong's "outstanding universal value" UNESCO said the monuments "are exceptional testimony to the unified Koryo civilisation as Buddhism gave way to neo-Confucianism in East Asia".

As the decision was announced several black-suited North Korean delegates at the United Nations Educational, Scientific and Cultural Organisation committee annual session in Phnom Penh, stood and clapped.

Thanking UNESCO for the listing, one of the North Koreans hailed the "joyful occasion" in a brief statement to the auditorium.

Kaesong was established in 919 as the capital of the Goryeo dynasty (918-1392) - also known as Koryo - which gave its name to the modern state of Korea.

The dynasty is credited with creating a unified national identity for the first time.

When the Korean peninsula was partitioned along the 38th parallel after World War II, Kaesong was in South Korea.

During the 1950-53 Korean War, it came under North Korean control and remained so until the end of the conflict, thus becoming the only city to change from South to North control as a result of the war.

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Osborne laughs off Obama's name gaffe

BRITISH finance minister George Osborne has laughed off Barack Obama's G8 gaffe when he repeatedly called the chancellor "Jeffrey".

The US president apparently mixed the chancellor up with one of his favourite soul singers, Jeffrey Osborne.

"It's nice to be on first name terms with the President of the United States, even if he sometimes gets the name wrong, that's the way I look at it," the chancellor joked.

The inside gossip from the summit in Northern Ireland led to a bizarre suggestion from the R&B star - whose hits include 1980s tune On the Wings Of Love - that they could sing a duet together.

Appearing on BBC1's Andrew Marr Show alongside shadow chancellor Ed Balls, Osborne explained that "sadly I can't sing".

Balls - a big fan of showing off his vocal skills at karaoke - said "go on George, sing".

But the chancellor said: "He asked me to do a duet but sadly I can't sing. He then asked me for a game of golf but I can't play golf. It's not going very well this new friendship."

He acknowledged that the US singer was "the cool Osborne".

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