SYDNEY, Nov 21 (Reuters) - Australian shares recovered to trade virtually flat on Friday, after earlier hitting a five-year low, as investors stepped in to buy at the cheaper levels following this week's heavy losses.
The benchmark S&P/ASX 200 index <.AXJO> was 14 points firmer at 3,366.9 at 0418 GMT, after hitting a low of 3,217.5.
"The market is due for a rally. I am pretty confident that we will see one pretty shortly, possibly next week," said David Spry, research manager at F.W. Holst.
"If there is no real negative news overnight, I wouldn't be surprised if we see some sort of rally here next week."
New Zealand's benchmark NZX 50 index <.NZ50> closed down 2.5 percent to 2,578.1.
STOCKS ON THE MOVE
* Gold companies Sino Gold Mining and Lihir Gold rose 6.4 percent and 6.2 percent to A$2.68 and A$1.73 respectively, benefitting from a recent firming in bullion prices.
"Gold was up pretty strongly. It's probably one sector in the market which, as time goes on, might continue to do a bit better..It would not surprise me if we see more focus on gold companies," said Spry at F.W. Holst.
0418 GMT
* Energy companies such as oil explorer Nexus Energy Ltd and Linc Energy took a hit after oil prices dropped more than 7 percent to below $50 a barrel.
Nexus said on Thursday it would consider a full sale of the company, and fell 17.3 percent Friday to A$0.34, while Linc Energy was down 8.8 percent at A$2.19
"This time 6 months ago, it was conventional wisdom that we were running out of oil, that oil was going at $300/barrel, and that there was going to be an energy crisis...it just shows you how wrong collective market can be, and 48 dollars has been pretty wrong for a lot of these people out there," said Wright.
0108 GMT
* AXA Asia Pacific Holdings Ltd , Australia's seventh-biggest retail fund manager, defyed the broader market and rose 1.4 percent to A$3.70.
There had been fears the company would increase its capital Friday at its strategy day, but AXA said it ended October with capital of A$724 million in excess of its regulatory requirements.
0107
* Fortescue jumped 10.5 percent to A$1.42 after announcing Thursday it had increased sales to China, in stark contrast to the gloom surrounding the sector over fears of weakening demand.
2346 GMT
* Australian timber group Gunns Ltd , rose 3.2 percent to A$0.81. The company said it had told Tasmania's state government it would not seek to renew its sovereign risk agreement for wood supply to its Bell Bay pulp mill project.
