Australia shares hit 7-week highs, mining stocks soar

(Adds analysis, quotes, stocks on the move)

SYDNEY, July 12 (Reuters) - Australian shares rose 0.7 percent to a 7-week high on Friday, underpinned by mining stocks, as Wall Street closed at record highs after the Federal Reserve reassured investors it would maintain its quantitative easing policy.

Miners posted strong gains after copper prices hit their highest in nearly a month on Thursday. BHP Billiton Ltd and Rio Tinto Ltd (Xetra: 855018 - news) climbed 2.2 percent and 1.8 percent.

Gold producers also pushed higher, Newcrest Mining Ltd (Other OTC: NCMGF - news) soared 7.3 percent while Regis Resources Ltd jumped 2.3 percent as bullion rose to a near three-week high.

The index has bounced back from heavier falls in June as Bernanke said the U.S. jobless rate of 7.6 percent overstated the health of the labour market and maintained that a "highly accommodative" policy is needed for the foreseeable future, triggering a rally in global equities.

The S&P/ASX (Other OTC: ASXFF - news) 200 index rose 34.4 points to 5,000.3 by 0211 GMT, its highest point since May 24 in a fourth consecutive session of gains. The benchmark rose 1.3 percent on Thursday.

"With Bernanke reemphasising the fact that he is committed to this easing cycle and making sure that the US recovery is sustainable after they decide to pull off QE - that has really encouraged investors to stay with this market," said Stan Shamu, IG (LSE: IGG.L - news) 's market strategist based in Melbourne.

"That's probably going to be the key going forward and whether or not analysts start revising their forecasts."

Defensives also helped buoy the market. Grocer Woolworths Ltd rallied 1.9 percent while flagship telecommunications provider Telstra Corporation Ltd added 0.4 percent.

Insurers Suncorp Group Ltd rose 2.5 percent and Insurance Australia Group Ltd gained 2.7 percent.

The S&P 500 index and the Dow industrials closed on Thursday at record highs, a day after Federal Reserve Chairman Ben Bernanke said the U.S. central bank will keep a loose monetary policy for some time to lower the unemployment rate.

New Zealand's benchmark NZX 50 index rose 0.3 percent to trade at 4,574.8 points.

STOCKS ON THE MOVE

* WorleyParsons Ltd climbed 2.1 percent to A$21.41 after the delivery and consulting services company won a contract for an integrated gas-to-liquid (GTL (BSE: GTL.BO - news) ) and ethane cracker complex.

(0212 GMT)

* Aura Energy Ltd tumbled 30.3 percent to an all-time low of A$0.05 after Areva Mines ended progress discussions with Aura for its Haggan Project.

(0214 GMT)

(Reporting by Thuy Ong; Editing by Eric Meijer)

Source: http://news.yahoo.com/australia-shares-hit-7-week-022610710.html

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