Australian stocks: Banks, media boost stocks to new record

MELBOURNE - Australian stocks hit a new record and finished 0.3 per cent higher on Tuesday, shored up by the top banks ahead of their profit results and speculation on the prospect of media takeovers within the next 18 months.

The benchmark S&P/ASX 200 finished 11.6 points higher at 3,717.4, just shy of an all-time high of 3721.1 touched in the afternoon. A hefty A$2.9 billion ($2.1 billion) worth of shares traded hands.

"The market remains quite strong here. It just shows you the weight of money that's out there looking to be invested," said Shaw Stockbroking dealer Jamie Spiteri.

The top four banks, led by a 0.9 per cent rise in Commonwealth Bank of Australia, all climbed, accounting for 30 per cent, or 3.5 points, of the index's gains.

"Perhaps we're just seeing a bit of a swing of money out of resources back into the banks after they've been a bit unloved in the last few weeks," said Justin Gallagher, ABN AMRO's head of Sydney sales trading.

Media stocks jumped for a second straight day on the prospects that the newly strengthened conservative government will push through legislation to relax media ownership rules, paving the way for potential radio, tv and newspaper takeovers.

Media groups in the spotlight includeed potential takeover targets West Australian Newspapers, up 3.4 per cent and Seven Network, up 2.3 per cent. Radio group Austereo, which could be a predator, rose 5 per cent.

"I don't think anything's going to change in the short term. I think it's a bit overdone," F.W. Holst research manager David Spry said of the speculation on new media ownership rules.

Rupert Murdoch's News Corp, seen as a potential predator, rose to A$11.23, but finished down 1 cent at A$11.10.

The top gainer among the 200 biggest stocks was SPC Ardmona, which surged 15 per cent to A$1.88 after National Foods said it wanted to take over the canned fruit, baked beans and jams group.

Analysts estimated National Foods would offer between A$1.80 and A$2.00 for SPC Ardmona and a takeover could boost its earnings per share by as much as 10 per cent, which helped push National Foods up 5.3 per cent to A$4.77.

Top miner BHP Billiton fell 0.2 per cent and rival Rio Tinto slipped 0.1 per cent after copper and aluminium prices eased on the London Metal Exchange.