Australian stocks: Shares end firm, Babcock & Brown jumps

SYDNEY - Australian shares rose 1.6 percent today as higher copper and gold prices the previous day boosted miners like BHP Billiton, while investment firm Babcock and Brown jumped after raising its earnings forecast.

The benchmark S&P/ASX 200 ended 76.9 points higher at 5,053.7, based on the latest Reuters data, after slipping to its lowest close in more than two months on Thursday.

The index fell 0.9 percent on the week - its second straight weekly drop -- and is down 6.5 percent from a record peak scaled on May 10.

"There was a bit more buoyancy today, which is very good. This volatility, specially in lot of these single-commodity stocks, is making people pretty nervous at the moment," said Peter Wright, a sales operator with stockbroker Burrell & Co. Ltd.

Shane Oliver, head of investment strategy at AMP Capital Investors, said investor's expectations on returns from the resource sector would turn moderate after the recent churn in global metal markets.

"People will be more cautious with the resources sector, but that is often the way with corrections, it shakes out weak players. It's like the bull has to shake a few people off its back before it can keep going," he added.

STOCKS TO WATCH

* Investment and advisory firm Babcock & Brown Ltd. firmed 6.2 percent to A$19.97 after raising its earnings per share growth forecast for 2006 to at least 35 percent from 20 percent.

* Property investor Macquarie Goodman Group MGQ.AX climbed 7 percent to A$5.36 as it resumed trading after raising A$350 million at a premium to its last traded price for a European acquisition.

* Macquarie Infrastructure Group gained 3.3 percent to A$3.40 on expectations that the refinancing of its M6 toll road in Britain and network enhancements would boost traffic on the tollway. "Post the refinancing, M6 Toll will also pay out an up-front one-off distribution to MIG. However, no comment was made on how these proceeds would then be distributed to MIG security holders," Goldman Sachs JBWere said in a report.

MIG was the third most active stock, with volume of 97 million shares.

* The world's top miner, Billiton Ltd./Plc. BLT.L, jumped 4 percent to A$28.55 and Rio Tinto Ltd./Plc. RIO.L added 4.6 percent to A$80.41. Gold XAU= edged above $650 an ounce on Friday while copper MCU3 prices crept lower after gaining 3.3 percent the previous day.

* New Zealand's top appliance maker, Fisher and Paykel Appliances Ltd., rose 4.9 percent to NZ$4.25 despite a 7 percent fall in annual profit as investors cheered its upbeat earnings forecast for next year, based on a lower NZ dollar and cheaper raw materials.

* Medium-sized New Zealand insurer and fund manager Tower Ltd. extended gains, adding 2.8 percent to A$2.62. Goldman Sachs JBWere lifted its long-term rating on the stock to "buy" from "hold" after Tower reported strong growth in its first-half profit on Thursday.