Australian stocks: Strong earnings boost Aussie shares

SYDNEY - Australian shares rose 1.3 per cent on Thursday, as strong earnings from Alumina and a profit upgrade by insurer Suncorp-Metway Ltd. lifted investors' expectations for the reporting season.

The benchmark S&P/ASX 200 index .AXJO added 66.0 points to 4,997.5, based on the latest available data, recovering from Wednesday's two-week closing low.

"It's a good start to the reporting season," said Robert Hook, a portfolio manager with S.G. Hiscock & Co. Ltd. "Suncorp has always been more conservative and news will be viewed positively."

Suncorp-Metway, Australia's fourth-largest insurer, firmed 3 per cent to A$19.40 after it said it expected a full-year profit of about A$900 million ($687 million), compared with consensus forecasts of A$846.03 million according to Reuters Estimates.

Stocks to watch

* Rio Tinto Ltd./Plc RIO.L, the world's second-biggest miner, rose 2.0 per cent to A$76.15. Just after the provisional close, Rio said first-half net profit jumped 80 per cent to US$3.75 billion, compared with analysts' forecasts of $3.43 billion.

* Alumina Ltd., a unit of the world's top aluminium producer Alcoa Inc. AA.N, climbed 3.9 per cent to A$6.40 after reporting a 59 per cent rise in first-half profit on strong demand for aluminium.

* Australian farm chemicals company Nufarm Ltd. jumped 11.3 per cent to A$9.69 despite saying that its fiscal 2006 operating profit would be broadly in line with a year ago. Investors who had sold the stocks ahead of the earnings report because they were expecting worse, covered their positions.

* Auto brakes maker Pacifica Group Ltd. fell 4.9 per cent to A$1.95 after it warned that falling sales of large cars in Australia and rising input costs could eat into its full year profit.

* West Australian Newspaper Holdings Ltd. gained 3.9 per cent to A$8.73 after its full-year net profit, excluding significant items, of A$107.5 million was above the consensus in Reuters Estimates of A$99.72 million

* UNiTAB Ltd., Australia's second-biggest wagering company, slipped 1.8 per cent to A$14.30 after the competition regulator said late on Wednesday that the proposed acquisition of UNiTAB by Tabcorp Holdings Ltd. was likely to lessen competition, based on its preliminary findings. Tabcorp added 1.2 per cent, while Tattersall's Ltd. TTS.AX, which has an agreed bid for UNiTAB on the table, gained 1.5 per cent to A$2.77.