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Australian shares at 14-month high led by miners and banks

Friday, 5 Oct 2012 | 2:49 AM ET

SYDNEY, Oct 5 (Reuters) - Australian shares rose 0.9 percent to their highest close in more than 14 months on Friday, tracking a fourth day of gains on Wall Street on expectations of positive U.S. payrolls data later in the day. Mining and banking stocks led the rise.

The number of Americans filing new claims for unemployment benefits rose only slightly last week after a big drop the week before, the Labor Department reported, raising hopes that Friday's closely watched non-farm payrolls report would show improvement.

The benchmark S&P/ASX 200 index

rose 42 points to 4,494.4, its highest close since August 1, 2011. It was 2.4 percent higher for the week, continuing rises since Australia's central bank cut rates by 25 basis points to 3.25 percent on Tuesday.

"We also had some fairly positive U.S. economic data on the unemployment claims front, that really has panned out well for our local market," said Stan Shamu, market analyst at IG Markets.

"We're just seeing a broad recovery in risk assets, with all the developments overnight."

Among the major miners BHP Billiton

gained 1 percent while rival Rio Tinto jumped 1.8 percent. Newcrest Mining advanced 3.1 percent after gold soared to its highest price in 11 months. .

The strength in gold miners in particular, is due to investors realising quantitative easing is set to continue for a long time, making gold a very attractive measure against inflation, Shamu said.

Banks were strong, with Westpac

leading the gains, rising 1.2 percent.

Defensive stocks also rose, with blood products maker CSL

rising 1.2 percent and food retailer Wesfarmers

up 0.9 percent. Woolworths

gained 1.3 percent to A$29.63 after the top supermarket operator said it plans to spin off 69 shopping centres into a new property group valued at A$1.4 billion, and will raise up to A$506 million to partly fund the deal.

New Zealand's benchmark NZX 50 index

finished 0.6 percent or 22.9 points higher to 3,904.9.

(Reporting by Thuy Ong; Editing by Sanjeev Miglani)

((thuy.ong@thomsonreuters.com)(+61 2 9373 1236))

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