Australia Shares End Up 0.2% Despite US Weakness; ASX Jumps

The Australian share market rose 0.2% on Thursday despite slight weakness in offshore equity and commodity markets after China's share market reacted negatively to an interest rate hike in that country this week.

Australia's securities' exchange operator ASX Ltd.'s shares surged because of fresh moves toward consolidation in a number of its overseas peers. The market brushed aside disappointing earnings from Telstra and Alumina Ltd., while Rio Tinto and BHP were well supported before Rio's full-year earnings report, due later Thursday.

The benchmark S&P/ASX 200 closed up 9.6 points, or 0.2%, at 4914.4 after creeping up in a narrow range of 4901.4 to 4915.0. Trading volume was about average.

Overnight, the S&P 500 fell 0.3% and London Metal Exchange copper fell 1.3% after China's Shanghai Composite closed down 0.9% on Wednesday.

MF Global Senior Institutional Trader Anthony Anderson said the Australian share market factored in China's weakness on Wednesday.

"I would have thought so because most sectors were down yesterday," he said, adding that the interim 2011 earnings period was going quite well in Australia, with a range of companies reporting strong results.

Shanghai was up 0.8% late Thursday, while Hong Kong was down 0.7% and Japan was flat.

"Banks are up on seriously good results and there's a certain amount of optimism for large-scale capital management from resource companies this earnings season," said Anderson.

Commonwealth Bank of Australia underpinned the market with a 1.0% rise to A$55.60 after its first-half profit beat market expectations on Wednesday.

ANZ rose 0.7% and Westpac rose 0.6%, while National Australia Bank fell 0.2%.

ASX Ltd. rose 4.7% to A$38.41 on hopes the Australian government will approve its proposed merger with Singapore Exchange after the London Stock Exchange agreed to merge with TMX Group and Deutsche Boerse said it's in advanced merger talks with NYSE Euronext.

Telstra fell 0.4% to A$2.88 after a 36% fall in its interim profit to A$1.19 billion versus market expectations of about A$1.41 billion. In addition, it announced the agreement of commercial terms on an A$11 billion deal for Australia's national broadband network. Telstra also said it gained customers in the period and its strategy remained on track. The telco kept its full-year guidance for earnings and dividends, although it didn't make any allowance for recent extreme weather events in Australia.

Alumina Ltd. fell 1.2% to A$2.46 after reporting a net profit of US$35 million for the fiscal year, which was well below market consensus, according to Goldman Sachs. A fully-franked final dividend payment of 4 U.S. cents a share versus 2 cents in the first half and 1.8 cents in 2009, along with Alumina's comments that demand is set to grow 12% in fiscal 2011, helped limit the negative share price reaction.

Rio Tinto rose 0.3% to A$88.68 before its full-year results, due at 0600 GMT Thursday.

Elsewhere, Wesfarmers, rose 1.2% to A$33.91, Newcrest Mining rose 1.0% to A$37.70, QBE rose 0.8% to A$18.65, Oil Search rose 2.7% to A$6.85 and Incitec Pivot rose 5.4% to A$4.66.

Australia's unemployment rate remained at 5.0% as expected in January. Employment rose 24,000 versus expectations of 15,000, although the rise was mainly based on part-time jobs.

（source from : Dow Jones）