Australia shares seen up on global economy optimism

SYDNEY, April 6 - Australian stocks are expected to extend gains on Monday on optimism that a slump in global economy could end soon.

Rio Tinto Ltd <RIO.AX> could be in focus after a media report said the global miner had lined up a $8 billion rights issue as a back-up for Chinalco's $19.5 billion cash injection deal, which is awaiting approval from the Australian government. [ID:nSYD409992].

Bank shares are seen leading gains on hopes that stability in global debt markets could lower banks' funding costs and revive demand for loans. Comments by Fed Chairman Ben Bernanke that the central bank will do everything it can to stabilize banks will also lend support.

Growing conviction that the worst is over for the world economy helped Wall Street shrug off dour jobs data showing the highest unemployment rate since 1983.

Reflecting that optimism, Australian June share price index futures <YAPcm1> firmed 33 points to 3,773.0, representing a 37-point premium to the underlying share index's close on Friday.

The benchmark S&P/ASX 200 index <.AXJO> rose 55.4 points, or 1.5 percent, to 3,735.6 on Friday, its highest close since Jan. 9. The index logged its fourth straight weekly gains.

New Zealand shares edged up 0.3 percent to 2,622.9 points.

Key events this week include Reserve Bank of Australia's interest rate-setting meeting on Tuesday, with the market split on whether the central bank will hold or cut rates. March employment data is due on Thursday.

Among corporate events, QBE Insurance Group Ltd <QBE.AX> holds its annual shareholders meeting on Wednesday while Bank of Queensland Ltd <BOQ.AX> has its first-half earnings on Thursday. ----------------------MARKET SNAPSHOT @ 2202 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG S&P 500 <.SPX> 842.5 0.97% 8.120 USD/JPY <JPY=> 100.31 0.04% 0.040 10-YR US TSY YLD <US10YT=RR> 2.8945 -- 0.000 SPOT GOLD <XAU=> 895.45 0.33% 2.950 US CRUDE <CLc1> 52.32 -0.36% -0.210 DOW JONES <.DJI> 8017.59 0.50% 39.51 ASIA ADRS <.BKAS> 97.49 0.66% 0.64 ------------------------------------------------------------- * Dow ends above 8,000 in best 4-week run since 1933 [.N] * Oil settles slightly lower, job report weighs [O/R] * Gold falls as optimism dents safe-haven demand [GOL/] * Copper hits 5-month high, higher demand expected [MET/L]

For a digest of the day's business stories in Australian newspapers, double click on [PRESS/AUB]