AUSTRALIAN stocks were trading up slightly at noon, spurred by resource stocks benefiting from stronger metals prices.

At 1200 AEDT the benchmark S&P/ASX200 index was up 16.9 points at 5470.5, while the All Ordinaries Index rose 17.2 points to 5449.6. On the Sydney Futures Exchange, the December share price index contract gained 28 points to 5474, on a volume of 4338 contracts.

Resources stocks were the major movers on the market, thanks to stronger metals prices. Nickel hit a new high on Friday, pulling zinc close to peak levels and other metals higher as supply problems lifted sentiment on the London Metal Exchange (LME).

Subsequently, mining giant BHP Billiton was up 31 cents at $26.43, and rival Rio Tinto increased 58 cents to $75.00.

US stocks dropped on Friday in light trade after the Thanksgiving holiday. The Dow Jones Industrial Average fell 46.78 points to 12,280.17, and the Standard & Poor's 500 Index slipped 5.14 points to 1400.95. The Nasdaq Composite Index declined 5.72 points to 2460.26.

ABN Amro Morgans Ipswich manager Tony Russell said the market was trading in positive territory in spite of the weak US lead.

Mr Russell predicted the US market would hit its straps tonight.

"Resources are a tad better and it's forced our market up on fairly light volume, with no real lead coming out of the United States. We'll probably get that tonight," he said.

Mr Russell said he expected further consolidation with recent gains on the Australian exchange.

At 1211 the banks had lost ground, with the National Australia Bank leading the way. NAB shed 11 cents to $38.35, Commonwealth Bank two cents to $47.79, and ANZ eight cents to $28.05. Westpac bucked the negative trend, gaining one cent to $24.32.

In energy news, Origin Energy today announced a $1.2 billion acquisition of energy business Sun Retail from the Queensland Government, while AGL Energy bought Sun Gas retail business from the same seller for $75 million.

Origin Energy shares added 12 cents to $23.53, and AGL Energy stock 29 cents to $15.62.

Diversified industrial group Wesfarmers Ltd announced plans to buy Australian business Linde Gas Pty Ltd from The Linde Group of Germany for about $500 million.

The Australian company said it had entered into a preliminary agreement with The Linde Group which may lead to the purchase of Linde Gas early in 2007. Wesfarmers shares rose 13 cents to $35.03.

Other energy stocks were mixed, with Woodside Petroleum jumping 58 cents to $36.72, and Oil Search gaining two cents to $3.29. However, Santos dropped three cents to $10.40.

In telecommunications, Telstra fell back one cent to $3.70, while T3 shares held their ground, steady at $2.26. Singapore Telecommunications, owner of rival telco Optus, lost one cents to $2.44.