Australia shares rise as Toll takeover boosts sentiment

* Shares (Frankfurt: DI6.F - news) rise 0.5 pct

* Index up 8.8 pct YTD, in sight of 7-year high

* 134 shares up, 54 down, 13 unchanged (Adds analysis, quotes, stocks on the move)

By Swati Pandey and Naomi Tajitsu

SYDNEY/WELLINGTON, Feb 18 (Reuters) - Australian shares rose 0.5 percent on Wednesday underpinned by resources and energy stocks while a $5.1 billion takeover of Toll Holdings by Japan Post helped overshadow weak corporate earnings.

The S&P/ASX 200 index rose 28.4 points to 5,886.6 by 0117 GMT. The benchmark eased 0.5 percent on Tuesday. The index is up 8.8 percent so far this year, staying in sight of a seven-year high.

The market had opened strong on hopes of a Greece debt deal but quickly lost steam following disappointing earnings. It gathered momentum after the shares of freight and logistics firm Toll opened 47 percent higher to their Tuesday close.

"We have shaken off some early jitters and now nicely entrenched in positive territory, a lot of optimism is really boosted by the takeover of Toll Holdings," said Ben Le Brun, market analyst at OptionsXpress.

Energy stocks such as Oil Search, Origin and Caltex were up 1 to 3 percent. Major miners Rio and BHP Billiton (NYSE: BBL - news) rose 0.9 and 0.4 percent, respectively.

Financials alone weighed on the index following poor earnings and dismal guidance from top companies such as IAG and ANZ Bank.

"From an earnings point of view, there's been more misses than hits today. Some of the more fancy ASX companies such as Ardent Leisure, Primary Healthcare, CarSales.com were significant losers," Brun said.

They were down between 3 and 11 percent.

IAG fell nearly 10 percent while ANZ fell about 1 percent, extending losses from Tuesday. Other major banks such as Commonwealth Bank and Westpac were marginally up.

Genworth Mortgage Insurance Australia fell over 21 percent after Westpac cancelled a sales agreement.

New Zealand's benchmark NZX50 index slipped 25.6 points or 0.4 percent to a three-week low of 5,722.91 in early trade, stung by a sell-off in construction materials maker Fletcher Building (NZSE: FBU.NZ - news) .

Fletcher tumbled 5.3 percent to a three-week low of NZ$8.28 after it reported a 25 percent fall in first-half profit.

Specialised milk processor A2 Milk rose 2 percent to NZ$0.51 on the back of a rise in global dairy prices at the latest auction.

Electricity generator and retailer Meridian Energy rallied 1.8 percent to NZ$1.94 after it reported a 38 percent jump in first-half profit.

A slight rise in half-year profit boosted online auction site Trade Me (NZSE: TME.NZ - news) , which rose 1.7 percent to NZ$3.68.

(Editing by Jacqueline Wong)