AUSTRALIAN INDEX GAINS 10PCT IN 2003.

SYDNEY, Jan 1 Asia Pulse - Despite a shaky start to 2003, the Australian share market has gaining nearly ten per cent in 2003.

The index has put the bear market behind it heading into the new year, after gaining nearly 10 per cent in 2003, despite the war in Iraq and SARS.

The bourse made a shaky start to the year with a sell-off in the months leading up to the Iraq war in March but rebounded as the conflict ended and confidence about a pickup in world growth grew.

"We started the year thinking about Saddam Hussein and we finished it that way as well," AMP's top investment strategist Shane Oliver said.

"Going into the war with Iraq confidence fell into a bit of a hole, and then as the war started to fade as an issue suddenly there's a rebound in confidence.

"That was associated with a rebound in share markets."

Australia also faced the impact of SARS and drought on company profits and business confidence - although both those issues had all but dissolved by mid-year.