Australian stocks: Shares end at 4 1/2 month high

SYDNEY - Australian shares rose to a 4 1/2 month closing high today, driven by gains in top miner BHP Billiton Ltd, while takeover talk lifted shares in Symbion Health Ltd..

Australia's benchmark S&P/ASX 200 Index gained 40.2 points, or 0.79 per cent, to 5,154.1, based on the latest available data. The index has risen 164.5 points since Wednesday, booking its biggest three-day points gain in over a decade.

The index gained 3.4 per cent on the week, rebounding from 1.1 per cent decline last week.

Dealers said that an upbeat US market will continue to support the Australian market, while takeover activity, which swept the market this week, will keep investors on their toes.

"Looks like the market is in a more positive frame of mind with the latest consumer confidence data from the US and the housing figures were good," said Eric Betts, equities strategist at Nomura Australia.

"People are looking more at the upside and is likely to trade in tandem with the US markets and on M&A as well," he added.

In Australia, BHP Billiton rose 0.99 per cent to AUS$25.63 on news of a deal with copper smelters that means it will pay lower treatment and refining charges, potentially lifting its annual earnings.

Rio Tinto Ltd./Plc. was up 0.94 per cent at AUS$70.10.

Symbion rose 2.4 per cent to a 4-½ month high of AUS$3.42 as the market speculated that the firm may be on the prowl for its next takeover target after its offer for Primary Health Care Ltd.'s pathology arm was rejected last week.

"The company has said that it is on the lookout to acquire something so it's a possibility," said a dealer at an Australian brokerage, who declined to be identified.

Insurance Australia Group Ltd. gained 1.5 per cent to AUS$5.28 after it said it would buy Britain's fifth-largest car insurance broker, Hastings Insurance Services Ltd., and another UK insurer, Advantage Insurance Co., for AUS$350 million in its first move into Europe.

Other insurers also gained, with Promina Group Ltd. rising 4 per cent to AUS$5.93 while QBE Insurance Group Ltd. was up 3.1 per cent at AUS$24.50.

Energy-related stocks were higher, with Oil Search Ltd. rising 1.5 per cent to AUS$3.38 and Arc Energy gaining 2.9 per cent to AUS$1.44.

Martin Arnold, equities economist at Commonwealth Securities said that despite a dip in crude oil prices, speculation that Opec will cut production following a slide in oil prices, would continue to support energy stocks.

Australian Pharmaceutical Industries Ltd. continued to slip, falling 5.5 per cent to AUS$2.23 after a profit warning on Wednesday.

- REUTERS