Australian shares up, consolidates at 4.5-year high; Rio at 1-yr high

MELBOURNE, Feb 14 (Reuters) - Australian shares rose 0.7
percent on Thursday to consolidate the market's hold around a
four-and-a-half year high, as miners rallied on expectations new
Rio Tinto Chief Executive Sam Walsh could impress when the
company reveals its full-year earnings later in the day.
Gains in some banking stocks and others, such as Wesfarmers,
also boosted the local bourse.
The market has been on a strong run for several months,
climbing 8 percent since the start of the year and 16 percent
since mid-November, buoyed by a global shift in asset allocation
towards equities. Receding euro zone and U.S. debt worries, and
strong earnings have underpinned the rally.
Rio Tinto added 2.3 percent to A$72.07, its highest in a
year, while iron ore rivals BHP Billiton gained 2.6
percent to A$38.89 and Fortescue Metals gained 4.3
percent ahead of Rio's annual profit result, due at 0600 GMT.
"There is plenty of positioning in Rio Tinto ahead of its
full-year results. With the recent change in guard we are likely
to get a few surprises as Sam Walsh looks to impress," said Stan
Shamu, strategist at IG Markets.
"Other things to look out for will be any updates on cost
reduction, growth targets for iron ore output and any possible
write-downs," he said.
Rio sacked chief executive Tom Albanese in January and
revealed a $14 billion writedown almost entirely on the value of
his two most significant acquisitions, the Alcan aluminium group
and Mozambican coal. Albanese was replaced by Walsh, an
Australian, who headed Rio's operations in iron ore, where it is
the world's second largest producer.
Rio is expected to report a 49 percent plunge in second-half
profit to $3.93 billion, excluding big writedowns, though that
would still leave full-year profit at $9.08 billion. Iron ore is
expected to make up close to 90 percent of earnings, with losses
expected in aluminium and diamonds..
The benchmark S&P/ASX 200 index added 33 points to
5,036.9, according to the latest data. The gains consolidate
Wednesday's market close above the 5,000 mark - the best finish
since the Lehman Brothers collapse in September 2008.
New Zealand's benchmark NZX 50 index rose 0.4
percent to 4,239.2.
On the earnings front, Wesfarmers Ltd rose 1.2
percent to A$38.88 after it beat expectations with a 9.3 percent
rise in first-half net profit and said it was cautiously
optimistic for the second half as it expects growth in its
retail business..
"The strong earnings report from Wesfarmers today is acting
like a bellwether for the general economy. The lift in revenue,
earnings, (net profit), EPS and dividend is giving traders a
green light to push our market to the next level," said Ben
Taylor, trader at CMC Markets.
Alumina was also in the spotlight, jumping 7.5
percent after China's Citic Resources Holdings bought
a 13 percent stake in the company for A$452 million ($467.5
million).

(Reporting by Miranda Maxwell; Editing by Shri Navaratnam)