(Adds details, comments)
SYDNEY, Jan 9 (Reuters) - Australian shares rose 0.4 percent on Wednesday, breaking a three-day losing streak as top miners and major banks helped to offset declines in department stores and some gold miners.
Analysts suspected that global fund managers were increasing their exposure to Australian equities through equity swap transactions, noting the market had gone up at the opening bell for three straight days.
"Each day on open we see a surge. This is typical what's known as equity swap transaction," said Michael McCarthy, chief market strategist at CMC Markets.
"What happens is that fund managers say they want exposure to shares around the globe, part of that will be Australia, and the investment bankers take the other side and try to hedge that exposure by buying shares in the market," he said.
Top miners managed to stay in positive territory at the close, with BHP Billiton Ltd gaining 0.2 percent and Rio Tinto Ltd adding 0.3 percent, after rounds of profit taking from a recent rally.
Gold miners sagged though, with Newcrest Mining Ltd losing 0.8 percent.
Banks helped lift the market, with a 1.0 percent rise in National Australia Bank and a 0.9 percent gain in Westpac Banking Corp.
The benchmark S&P/ASX 200 index was up 17.9 points at 4,708.1, according to the latest data. It fell 0.6 percent to 4,690.25 on Tuesday.
The market stood its ground even as retail sales data showed a fall of 0.1 percent for November, missing forecasts for a rise..
"It was a bit average," said Tony Russell, senior equities adviser at RBS Morgans. "This might be a bit of a fundamental change in how people are doing their shopping."
Supermarket chain Woolworths Ltd climbed 1.5 percent, reflecting a steady growth in groceries.
Myer Holdings fell 2.7 percent as the government report showed department store sales fell 0.4 percent in November. A Myer spokesman told Reuters last week the company was maintaining its forecast for flat Christmas and January sales.
Meanwhile, a measure of online sales from National Australia Bank jumped 15 percent in November, taking annual growth in sales to a brisk 27 percent.
Alumina Ltd rallied 4.6 percent after Alcoa Inc beat expectations on revenue. Alumina holds 40 percent of Alcoa World Alumina & Chemicals (AWAC), the world's largest alumina business, while U.S.-based Alcoa owns 60 percent.
Tiger Resources Ltd surged 7.6 percent after it said a feasibility study at its Kipoi copper project in the Democratic Republic of Congo confirmed a low-cost, high-margin project which can be commissioned after 16 months of development.
Discovery Metals Ltd lost 3.4 percent, after the Chinese bidder Cathay Fortune Corp said it was concerned that the actual reserves and grades at the miner's key copper project in Botswana could be significantly lower than previously stated.
Cathay said it required Discovery to provide the relevant information no later than Jan. 18.
New Zealand's benchmark NZX 50 index extended gains by 0.3 percent to close at a fresh 5-year high of 4,103.5.
Reporting by Maggie Lu Yueyang; Editing by Jacqueline Wong