Australia shares consolidate, BHP impresses in mixed bag of earnings

February 18, 2014

(Adds analysis, quotes, stocks on the move)

SYDNEY, Feb 18 (Reuters) - Australian shares were steady on Tuesday morning (Frankfurt: TDM.F - news) , holding near three-month highs as solid earnings from global miner BHP Billiton (NYSE: BBL - news) eclipsed a handful of weaker results.

In recent session the market has moved up rapidly as the earnings season has so far largely surprised on the upside.

The resources sector underpinned the market. BHP Billiton Ltd led the way, climbing 1.9 percent to a one-year high of A$38.75 after reporting a 31 percent rise in first-half profit as it cut debt towards levels that may prompt a share buyback.

"It's a very stock specific trading environment over the next two weeks", said Peter Esho chief market analyst at Invast Financial Services.

"I think the index is still in an upward trend, and I think it's very good to see stocks like BHP and other material stocks surprising on the outside."

Rival miner Rio Tinto Ltd (Xetra: 855018 - news) added 0.9 percent and Iluka Resources Ltd (Other OTC: ILKAF - news) rose 0.4 percent.

The S&P/ASX 200 index tacked on 1.1 points to 5,383.9 by 0122 GMT, its highest point since November 18. The benchmark gained 3.7 percent last week, snapping five consecutive weeks of losses and marking its biggest weekly rise since December 2011.

A string of strong earnings from blue-chip companies, including banks and miners, has helped the market rebound from a year-to-date low of 5,052.2 touched on February 5, putting the index 0.6 percent ahead for the year.

MacMahon Holdings Ltd (Other OTC: MCHHF - news) climbed 9.6 percent after the company posted a strong jump in first half earnings.

Australian packaging group Amcor Ltd tumbled 6.2 percent to A$10.11 after posting hefty gains in recent weeks ahead of its earnings. The company reported a 21.2 percent rise in first-half net profit.

"I think it's been bid up on a lot of high hopes, on big expectations over the past year. It's run very hard, I wouldn't be very surprised if I saw Amcor (Frankfurt: AXZA.F - news) slip below A$10," Esho said, adding that he is advising his clients to avoid the stock.

Taking the shine off the earnings season somewhat were a handful of mid-range companies, which were sold off after disappointing results.

Coca-Cola Amatil lost 6 percent to 2-1/2 year lows of A$11.14 as the Australian soft drink bottler posted an 83 percent fall in full-year profit.

Pacific Brands Ltd plunged 11.1 percent after the Australian clothing company reported a first half net loss after tax of A$219 million.

Among defensive stocks, biotechnology firm CSL Ltd (Other OTC: CMXHF - news) rose 0.9 percent and top telecommunications provider Telstra Corporation Ltd added 0.1 percent.

New Zealand's benchmark NZX 50 index slipped 0.1 percent to 4,891.5.


(Reporting by Thuy Ong; Editing by Shri Navaratnam)