MELBOURNE Nov 29 Australian shares rose 0.5 percent to the highest level in almost three weeks on Thursday, supported by banks and gains in global miner Rio Tinto after its upbeat outlook on China and cost-cuting pledges.
Rio rebounded 0.7 percent to A$57.11 after it said it was cautiously optimistic about a pick-up in growth in China, its biggest customer. Rio said it was aiming to cut more than $5 billion of operating and support costs by the end of 2014.
Rival BHP Billiton rose 0.3 percent to A$34.09.
"There are plenty of reasons to be negative but over the past few weeks we have found even more reasons to be positive," said Peter Esho, analyst at City Index.
"The often tired and fatigued sounding Rio Tinto only a few months ago is today a lot more upbeat. Rio puts forward a good convincing argument for optimism," he said, adding that "the market could get an earnings surprise next year".
The benchmark S&P/ASX 200 index was up 20 points at 4,467.3 by 0110 GMT, the highest since Nov 9. The index slipped 0.2 percent on Wednesday, but is up from a mid-November low of 4,334.3.
New Zealand's benchmark NZX 50 index rose 6 points to 4,018.1.
BHP Billiton said on Thursday it is looking outside the company and using external advisers to help with succession plans for its chief executive, following reports the world's biggest miner was preparing for changes at the top.
STOCKS ON THE MOVE:
* Banks rose, led by a gain of 0.8 percent in ANZ Banking Group, encouraged after U.S. stocks rose after the top Republican in the U.S. Congress expressed optimistim on reaching a budget deal with the White House.
* Slot machine maker Aristocrat Leisure rallied 7.5 percent to A$3.28 after brokers upgraded the stock following a rise in net profit to A$45.5 million in the nine months to September 30, up from $19.9 million a year earlier.
(Reporting by Miranda Maxwell; Editing by Michael Perry)