Australian shares rise on bargain-hunting

Australian shares rise on bargain-hunting

	Published : Tue, 23 Oct 2007 01:51 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australian shares were higher in early trade Tuesday as investors sought bargains following the market's steep decline from record levels achieved last week.

Trading was cautious as concern about the US economy persists, while in Australia, the interest rate climate was a worry as the release of third-quarter consumer price data on Wednesday might result in a rate hike in the near term.

'That could be the spooky bit - it could be bad for media and retail stocks if there is an interest rate rise,' Smith said.

At 10.15 am (0015 GMT), the S&P/ASX 200 was up 45.1 points or 0.7 percent at 6,622.4, after

falling 1.9 percent on Monday. The All Ordinaries index added 45.3 points or 0.7 percent at

6,637.4.

BHP Billiton was down 28 Australian cents at 45.64 dollars with softness in commodity prices offsetting a generally robust first-quarter production report released by the world's largest diversified resources group this morning.

Rio Tinto was up 83 cents or 0.8 percent at 106.30 dollars.

Newcrest Mining gained 9 cents at 28.73 dollars after releasing its quarterly production report.

Australia's largest energy retailer, AGL Energy, was up 6.0 cents or 0.5 percent at 12.97 dollars.

The stock is seen as a takeover target due to weakness in its share price following a downgrade in its earnings forecast last week.

Leading oil and gas stock Woodside Petroleum was down 23 cents at 52.07 dollars after oil prices eased overnight.

Banks were well supported with National Australia Bank up 47 cents or 1.2 percent at 41.04 dollars while Commonwealth Bank advanced 51 cents or 0.9 percent to 59.08 dollars.

Leading investment bank, Macquarie Bank, edged up 94 cents or 1.2 percent to 80.57 dollars after falling sharply on Monday.

Retailers were mixed with Woolworths up 38 cents or 1.2 percent at 32.33 dollars.

Smith said Woolworths is less exposed to the interest rate environment, being Australia's largest supermarket operator, with demand for food and liquor still seen solid even if interest rates do rise.

Department store owner David Jones, which is sensitive to interest rate adjustments, was down 1.0 cent at 5.81 dollars while clothing and bedding group Pacific Brands rose 16 cents or 5.1 percent to 3.30 dollars after forecasting that net profit for the year to June 2008 will be up at least

10 percent.

(1 US dollar = 1.13 Australian dollars)

bruce.hextall@thomson.com

bhx/ms

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.