March 4 (Bloomberg) -- Australian bank stocks rose, led by National Australia Bank Ltd., on optimism that the nation's credit growth will boost their earnings. BHP Billiton and Rio Tinto Ltd. fell after copper futures had their biggest drop in more than five years.

The S&P/ASX 200 Index added 0.5 point to 3389 at the close in Sydney. Bank stocks were the biggest gainers, cementing their position as the year's third-best performing of the 10 industry groups.

``As the economy picks up so do borrowing levels, or credit growth, by both business and consumers, which adds to banks' bottom lines,'' said Scott Marshall, head of research at Shaw Stockbroking Ltd. in Sydney.

Credit provided by banks to Australian consumers and businesses rose 1.3 percent in January from December and 15.7 percent from a year earlier, the largest annual increase since 1989, a report last week showed. Lending for housing rose 23.6 percent in January from a year earlier.

National Australia Bank, Australia's biggest lender, climbed 31 cents, or 1 percent, to A$31.37. the highest since October last year.

Australia and New Zealand Banking Group Ltd., Australia's fourth-biggest lender, rose 17 cents, or 0.9 percent, to A$18.17, the highest since June last year.

Westpac Banking Corp., the nation's third-biggest lender, added 8 cents, or 0.5 percent, to A$16.92.

BHP, the world's third-biggest copper miner, fell 38 cents, or 3 percent, to A$12.40 after setting a record yesterday. Rio, the world's fourth-biggest copper producer, shed 82 cents, or 2.2 percent, to A$36.10.

The Institute for Supply Management's services index, which includes construction, the biggest use for copper, fell to 60.8 from 65.7 in January. The median expectation of economists surveyed by Bloomberg News was for 63.5.

In New Zealand, the NZSX 50 rose 0.4 percent to 2473.18 as of the 5 p.m. close in Wellington. The NZSX 40 climbed 0.4 percent to 2262.25.

The following stocks rose or fell. The stock symbols are in brackets after the company names.

Australian stocks:

AAV Ltd. (AVV AU), a Melbourne-based broadcasting service, surged 15 cents, or 7.9 percent, to A$2.05. UBS AG raised its 12- month price forecast for the to A$2.70 from A$2.15 because of ``better than expected margins from manufacturing and higher revenue growth driven by additional capacity.''

The stock rose 8 percent yesterday after it said full-year profit rose to A$11 million from a loss of A$3.7 million the previous year.

AMP Ltd. (AMP AU) climbed 21 cents, or 4.3 percent, to A$5.11. Australia's largest life insurer said full-year operating profit more than doubled because stock market gains boosted investment income and the company cut costs.

Operating profit before one-time items rose to A$619 million ($463 million) in 2003, from A$257 million a year earlier, AMP said in a statement.

Avoca Resources Ltd. (AVO AU) climbed 3.5 cents, or 23 percent, to a record 18.5 cents after it returned high-grade drill results from its Mt Fisher gold project, Managing Director Rohan Williams said in a statement to the exchange.

Gold Aura Ltd. (GOA AU) gained 2.5 cents, or 17 percent, to 17.5 cents. The company found 250,000 ounces of high-grade gold at the Gameta deposit in Papua New Guinea, Executive Director Rob Murdoch said in a statement.

Integrated Research Ltd. (IRI AU) fell 3.5 cents, or 9.6 percent, to 33 cents. The software developer said Vodacom, South Africa's largest mobile-service provider, will use its Prognosis management software in Mozambique.

John Fairfax Holdings Ltd. (FXJ AU), owner of the Australian Financial Review newspaper, fell 7 cents, or 2.1 percent, to A$3.33. It is considering buying Trading Post Australia, a classified advertising publisher, for as much as A$500 million, the Australian Financial Review reported, without saying where it got the information. Trading Post, owned by Trading Classified Media NV, has 15 publications and five Web sites in Australia, the newspaper said.

Bruce Wolpe, a spokesman for John Fairfax, declined to comment.

Minerals Corp. Ltd. (MSC AU), a Sydney-based mineral explorer, climbed 0.5 cent, or 4 percent, to 13 cents after investing A$2.5 million in a Shanghai construction stone joint venture. The company expects to see a return in less than 18 months, Managing Director Charles Alexander said in a statement.

Nexus Energy Ltd. (NXS AU) rose 1.5 cents, or 8.1 percent, to 20 cents after confirming it holds a 100 percent interest in the VIC/P54 permit, an oil and gas exploration site. The company said it is accepting farmin proposals with a decision expected by the end of March, in a statement.

Precious Metals Australia ltd. (PMA AU) climbed 10 cents, or 71 percent, to a record 24 cents. The Perth-based miner said Directors James Wall and Angus Pilmer were replaced by Ian Macpherson and Michael Fry following a shareholders meeting yesterday.

Reckon Ltd. (RKN AU) rose 6 cents, or 7.1 percent, to a record 90 cents after reporting full-year profit rose to A$5.3 million from A$2.2 million a year earlier. The company didn't declare a dividend, Chairman Geoff Tomlinson said in a statement to the exchange.

Santos Ltd. (STO AU), Australia's largest natural gas producer, fell 24 cents, or 3.9 percent, to A$6.93. The shares traded without the right to its 15 cents dividend.

Sub-Sahara Resources NL (SBS AU), a Perth-based gold miner, rose 2 cents, or 19 percent, to 12.5 Australian cents. The company signed a joint venture deal with Barrick Exploration Africa Ltd. over the Nyanzaga project in Tanzania, Chief Executive Michael Griffiths said in a statement.

Techstar Ltd. (TSR AU) rose 5 cents, or 20 percent, to 30 cents. The technology developer requested a trading halt until Monday, in a notice to the exchange.

Tempo Services Ltd. (TEM AU) jumped 17 cents, or 15 percent, to A$1.33. The Australian cleaning and security services company said Merrill Lynch & Co. and other parties have asked to conduct due diligence ahead of a potential proposal to the company.

The approaches follows a 38 percent decline in Tempo's share price the past six months and the board has yet to consider the requests, the Sydney-based company said in a statement to the Australian Stock Exchange. No formal proposal has been put forward and talks are at a ``very preliminary stage.''

Village Roadshow Ltd. (VRL AU) shed 5 cents, or 3 percent, to A$1.61. Merrill Lynch & Co. cut its earnings forecast for Australia's largest cinema chain for fiscal year 2004 by 9.5 percent.

Village said yesterday costs related to a plan to buy back all of its preferred shares would reduce net income in the year ending June. About A$4 million ($3 million) in costs will lower the company's previous A$56.1 million profit forecast, the company said.

WMC Resources (WMR AU), the world's second-biggest nickel- concentrate producer, slid 9 cents, or 1.7 percent, to A$5.16. Nickel fell 3.2 percent to $13,850 a metric ton on the London Metal Exchange.

New Zealand stocks:

Carter Holt Harvey (CAH NZ) fell 3 New Zealand cents, or 1.5 percent, to NZ$2.02. It said it merged its forestry biotechnology operations in a new venture with Rubicon, bringing together New Zealand's two leading forestry biotechnology programs.

To contact the reporter for this story: Stuart Kelly in Sydney skelly22@bloomberg.net

Last Updated: March 4, 2004 01:03 EST