Australia Stocks Rise as Oil Bounce Buoys Asian Share Markets

SYDNEY--Australia's stock market rose Thursday as other Asian bourses also recovered ground, buoyed by a bounce in crude-oil prices.

The resources-heavy S&P/ASX 200 closed 0.5% higher at 5381.5, pulling higher after ending the previous two sessions in the red. The market was bolstered by a rally in Japan's Nikkei Stock Average, which closed 1.7% higher, and rallies on Wall Street and in Europe Wednesday. Stocks in Hong Kong and South Korea also lifted.

Oil extended its overnight gains in Asian trade Thursday, after snapping a four-session losing streak. "It has been a while since we have seen prices ending in green," said Phillip Futures analyst Daniel Ang.

The country's biggest listed miners, BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd. (RIO.AU), were able to recoup some of their recent losses to close up 1.0% and 2.4% respectively.

U.S. investment bank Jefferies encouraged clients to buy shares in Rio Tinto, citing expectations of a dividend increase and stock buyback at its full-year results in February.

Still, its analysts were cautious more broadly on mining sector stocks. "We continue to counsel investors to be selective within the sector," they said in a note.

A slip in iron-ore prices weighed on some producers, with investors wary over the outlook for the steelmaking commodity as supplies from new and expanded mines continue to increase. Iron ore fell 0.3% Wednesday to US$70.90/ton, according to data provider The Steel Index.

Mount Gibson Iron Ltd. (MGX.AU) closed 5.5% lower, while Gindalbie Metals Ltd. (GBG.AU) finished the session down 4.4%.

An unexpected lift in the number of Australian home-building permits issued in November helped keep the Australian dollar in positive territory. At 0646 GMT, it traded up 0.3% at US$0.8105. Approvals to build or renovate both houses and apartments increased by 7.5% on the month prior, according to the Australian Bureau of Statistics. Economists were expecting a 3.0% fall in November from October.

Write to Rhiannon Hoyle at [e-mail]