Australia shares race to 5-wk highs on strong Rio Tinto earnings, Wall St rise

Reuters - UK Focus

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SYDNEY, Feb 14 (Reuters) - Australian shares rose 0.8percent to five-week highs on Friday morning, spurred by solidearnings from index-heavyweight Rio Tinto (Xetra: 855018 - news) and a fifth rise insix sessions for Wall Street stocks.

Rio Tinto Ltd gave investors an unexpected gift, delivering a 15 percent hike in dividend after reporting a hugejump in second-half profit on Thursday, putting it in a strongposition for a big capital return in 2015.

Rio rose 0.9 percent and BHP Billiton Ltd climbed1.2 percent, while PanAust Ltd jumped 3.3 percent.

The S&P/ASX 200 index tacked on 41.3 points to5,349.4 by 0052 GMT. The market is on course to post a 3.2percent rise for the week, snapping five consecutive weeks oflosses and marking its biggest weekly rise since December 2011.

"I think that's certainly been a factor this week that theearning results have surprised on the upside, particularly withthe Telstra (Frankfurt: TSTA.F - news) dividend being increased and a substantial increasein the Rio dividend too," said Tony Russell, senior equitiesadviser at RBS Morgans.

"We've had strong results that's underpinning our market andalso a bit of optimism coming back in the United States."

The benchmark index stumbled in January, falling 3 percentas investors sold out of equities as investors fretted over slowing growth in China and the tapering of U.S. FederalReserve's massive stimulus.

U.S. stocks closed higher overnight, with the Nasdaq risingfor a sixth straight day, as investors looked past disappointingdata on consumer spending, chalking the weakness up to weatherinstead of weaker fundamentals. The Dow and S&P 500 rose for thefifth session in six.

Newcrest Mining Ltd slipped 0.4 percent afterreporting a 36 percent drop in first-half underlying profit onFriday, though the overall mining sector was generally wellsupported.

Among defensives, Australia's top telecommunicationsprovider Telstra Corporation Ltd rose percent. Bloodproducts maker CSL Ltd (Other OTC: CMXHF - news) bounced 1.5 percent, a modestrecovery from steep losses recently after its first half resultwas dented by the settlement of a U.S. antitrust class action.

Crown Ltd added 1.5 percent after Melco Crown (HKSE: 6883.HK - news) Entertainment , in which Crown holds aone-third stake, posted a 52.8 percent rise in full year netprofit, boosted by a flood of wealth Chinese gamblers keen topunt in its glitzy casinos.

Orica Ltd gained 2.8 percent after the commercialexplosives company entered into a long-term supply agreementwith CF Industries Inc.

Sims Metal Management Ltd jumped 5.5 percent afterthe world's largest recycler returned to profitability in thefirst half, citing improvements in its Australian and U.S.businesses.

New Zealand's benchmark NZX 50 index was flat at4,875.1.

(Reporting by Thuy Ong; Editing by Shri Navaratnam)

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