atlas seeking a partner to develop magnetite

Australian Stocks Advance, Led by Macquarie, Commonwealth, BHP

By Emma O'Brien

Nov. 29 (Bloomberg) -- Australian stocks jumped, led by Macquarie Group Ltd. and Commonwealth Bank of Australia on speculation the Federal Reserve may try to stem losses in the credit market by cutting U.S. interest rates again.

BHP Billiton Ltd. led mining stocks higher on anticipation a reduction in U.S. borrowing costs will boost consumer demand in the world's largest economy, and after metal prices rose.

``The Fed's taking out insurance on the economy and trying to pump margin into the balance sheets of banks and businesses,'' said Donald Williams, who helps manage the equivalent of $1.3 billion at Platypus Asset Management in Sydney. ``Our market is celebrating in line with what's happening over there.''

The S&P/ASX 200 reversed two days of declines, climbing 111.60, or 1.8 percent, to 6,480.20 as at 11:09 a.m. in Sydney. About nine stocks rose for each that fell.

Macquarie Group, Australia's largest securities firm, jumped A$3.60, or 4.7 percent, to A$79.60. Commonwealth Bank of Australia, the second-largest lender, increased A$1.22, or 2.1 percent, to A$58.88. Westpac Banking Corp., the fourth-biggest, added 37 cents, or 1.3 percent, to A$28. Babcock & Brown Ltd., the country's second-biggest investment bank, rose 52 cents, or 2.1 percent, to A$25.84.

National Australia Bank Ltd., the nation's biggest bank, gained 58 cents, or 1.5 percent, to A$39.98. The lender will buy the Omaha-based Great Western Bancorp. for $798 million to expand its agribusiness operations in the U.S.

Market `Turbulence'

U.S. stocks staged the biggest two-day rally in five years, led by financial shares, after Federal Reserve Vice Chairman Donald Kohn reinforced expectations for another interest rate cut. Citigroup Inc., Lehman Brothers Holdings Inc., Morgan Stanley and Goldman Sachs Group Inc. rose more than 5 percent as banks and brokerages in the Standard & Poor's 500 Index gained the most since 2002.

Stocks rallied after Kohn said market ``turbulence'' may reduce credit to businesses and consumers, suggesting he sees higher risks to economic growth than a month ago. A bigger-than- expected decline in orders for U.S. durable goods added to speculation the Fed will cut rates to spur the economy.

Odds the Fed will cut its target rate a quarter-percentage point for the second time this year are at 94 percent, according to futures traded on the Chicago Board of Trade. The bank cut borrowing costs a half-point in September.

BHP, Zinifex

Stocks with links to the U.S. economy also gained. Westfield Group, which owns 59 shopping malls in the U.S., added 44 cents, or 2.1 percent, to A$20.80. James Hardie Industries NV, the biggest seller of home siding in the U.S., increased 18 cents, or 3 percent, to A$6.20.

BHP, the world's largest mining company, rose A$1.01, or 2.4 percent, to A$42.30. Rio Tinto Group, which is fighting a takeover bid from BHP, added A$4.48, or 3.3 percent, to A$139.49. Zinifex Ltd., the world's third-largest zinc miner, gained 33 cents, or 2.4 percent, to A$14.19.

A measure of six metals on the London Metal Exchange added 0.9 percent. Copper rose 1.7 percent and zinc jumped 4.4 percent.

The S&P/ASX 200's futures contract for December added 1.8 percent to 6,501. The broader All Ordinaries Index gained 1.6 percent to 6,534.90.

The following stocks fell. Stocks symbols are in brackets after company names.

Ausquest Ltd. (AQD AU), a gold and nickel explorer, rose 1 cent, or 3.2 percent, to 33 cents. Ausquest will place shares onto the market and offer a specific share purchase plan in order to raise up to A$4.02 million ($3.6 million) to expand its exploration program at Table Hill in Western Australia's Pilbara region.

Atlas Iron Ltd. (AGO AU), the Australian iron ore explorer whose shares have risen more than fourfold this year, gained 3 cents, or 1.4 percent, to A$2.18. Atlas is seeking a partner to develop its A$2 billion magnetite iron ore project, it said yesterday.

Babcock & Brown Capital Ltd. (BCM AU), a fund managed by Australia's second-largest investment bank, climbed 31 cents, or 7 percent, to A$4.77. The fund is under attack from a U.K. investor which claims it has poor shareholder returns, inadequate capital management and high fees, the Australian newspaper said. London-based Pendvest, which holds 5.2 percent of Babcock & Brown Capital, sent them a letter demanding a special meeting to vote on returning half the company to shareholders and possibly winding it up completely, the report said.

ChemGenex Pharmaceuticals Ltd. (CXS AU), an Australian company developing a treatment for drug-resistant leukemia sufferers, rose 1.5 cent, or 1.5 percent, to A$1.03. ChemGenex will seek partners to market its medicine within the next six months, it said yesterday. Final-stage patent studies on the drug will be presented at a conference in Atlanta next month.

GrainCorp Ltd. (GNC AU), eastern Australia's largest grain handler, dropped 45 cents, or 4.7 percent, to A$9.20. The company posted a full-year loss of A$19.8 million after the country's multi-year drought slashed grain production.

Oxiana Ltd. (OXR AU), an Australian gold, copper and zinc explorer, rose 8 cents, or 2.2 percent, to A$3.69. The company is competing with Anglo American Plc to buy a copper mine in India from Hindustan Copper Ltd., the Australian Financial Review reported today citing Hindustan director O.P. Singh.

Sino Gold Mining Ltd. (SGX AU), owner of China's second- largest gold mine, increased 19 cents, or 2.8 percent, to A$7.02. Sino Gold extended its takeover offer for Golden China Resources Corp. and reduced the minimum acceptance condition to 66 and 2/3 percent from 90 percent yesterday.

Woolworths Ltd. (WOW AU), Australia's biggest retailer, rose 49 cents, or 1.5 percent, to A$32.51. A court in New Zealand overturned a ruling by the antitrust regulator barring Woolworths and Foodstuffs NZ Ltd. from launching a takeover of local retailer Warehouse Group Ltd. Both Woolworths and Foodstuffs are trying to increase their stakes in the company from 10 percent.