(Adds analysis, quotes, stocks on the move)
SYDNEY Feb 25 Australian shares rose to 5-1/2
year highs on Tuesday morning, supported by gains in the
banking sector and a jump in QBE Insurance shares on optimism
profit margins will improve in 2014 despite the insurer
suffering an annual loss.
A largely upbeat earnings season has given the market fresh
impetus in recent weeks, with many of the blue-chip banking and
mining companies putting up strong performances.
Commonwealth Bank of Australia, the top bank by
market capitalisation, rose 0.4 percent and National Australia
Bank gained 0.8 percent.
QBE Insurance Ltd posted a loss of $254 million,
but its shares climbed 3.8 percent to 6-week highs of A$12.09 as
the company said it would refocus its growth initiatives and
forecast premiums to grow 2.5 percent in 2014.
The S&P/ASX 200 index rose 0.2 percent, or 10
points, to 5,449.8 by 0113 GMT, after earlier touching a high of
5,461.7 -- its highest point since June 2008. The benchmark has
risen for eight consecutive sessions, its longest streak since
The market has rebounded from a loss of 3 percent in January
to add 4.9 percent so far this month on the back of a healthy
"We're up 8 percent over the past couple of weeks. There was
a lot of good moves on the earnings, I think the earnings
weren't as bad as people feared," said Shawn Hickman, managing
director of Market Matters in Sydney.
Putting the shackles on the market in early trade,
resources stocks lost ground as copper fell to its lowest in
more than two weeks. Index heavyweights BHP Billiton Ltd
and Rio Tinto Ltd lost 0.6 percent and 0.7
IOOF Holdings Ltd tumbled 5.6 percent after the
financial services provider reported its first half earnings, up
11 percent to A$368.3 million.
"The actuals were just okay, they were probably softer than
expected," said Evan Lucas, market strategist at IG in
Melbourne. "The fact that guidance is weaker with no actual
physical numbers given, it's why you're seeing IOOF off."
Ramsay Health Care Ltd soared 6.7 percent to all
time highs of A$47.55 after the company said its first half
revenue from services increased by 13.9 percent to A$2.36
Papua New Guinea's Oil Search Ltd was put on a
two-day trading halt as it is working on a significant
acquisition, the oil and gas producer said.
U.S. stocks jumped overnight, with the S&P 500 climbing
above key resistance to a record high, as optimism over merger
activity helped Wall Street erase this year's early weakness.
New Zealand's benchmark NZX 50 index edged 0.1
percent higher to 4,976.2.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)