Australia shares rise for 7th day, Santos jumps on earnings

* ASX 200 rises 0.3 percent, investors buy in for seventh consecutive session

* Gains capped as handful of shares including FXJ, DMP trade ex-dividend

* 120 shares higher, 65 shares lower, 15 shares unchanged (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Gyles Beckford

SYDNEY/WELLINGTON, Aug 22 (Reuters) - Australian shares rose 0.3 percent on Friday, boosted by solid earnings from Santos which supported the energy sector, though gains were tempered as some stocks traded ex-dividend.

The S&P/ASX 200 index rose 16.9 points to 5,655.8 by 0206 GMT. The benchamrk is on track to post its seventh consecutive session of gains, and is set to jump 1.6 percent for the week.

Santos Ltd soared 3.4 percent to A$15.07, its highest since November 2013, after the oil and gas producer beat forecasts with a 3 percent rise in first-half core profit.

Among other oil and gas producers, Oil Search Ltd added 0.4 percent, while Woodside Petroleum Ltd (Other OTC: WOPEF - news) advanced 0.3 percent.

The benchmark index hit a 5-1/2 week trough of 5,509.0 on August 8, but has since jumped some 150 points to trade at six-year highs, underpinned by a robust earnings season.

"What the market has been particularly bolstered by is the market capital return to shareholders, be it increased dividends, special dividends, or buybacks," said Tony Russell, senior equities adviser and stockbroker at Morgans.

"In a climate of low interest rates, investors have really warmed to that."

A handful of stocks also went ex-dividend, with Fairfax Media Ltd sliding 3.2 percent, Domino's Pizza Enterprises Ltd down 1.7 percent, and casino operator Echo Entertainment Ltd falling 2.8 percent.

Crown Resorts Ltd rose 1.6 percent after the Victorian State government extended the licence for its biggest casino by 17 years and scrapped a tax on high rollers.

Atlas Iron Ltd dropped 4.7 percent to two-week lows of A$0.65 after warning it would book around A$25 million in impairment charges for the 2014 financial year after selling its stake in Shaw River Manganese Ltd, some tenements and office space in a move to cut costs.

Australian shopping mall owner Federation Centres Ltd jumped 2.6 percent to a three-month high of A$2.72 after reporting a 8.2 percent growth in underlying earnings to A$242.9 million and said it expected earnings per security to rise in the year to June 2015.

New Zealand stocks edged higher for the fourth session in a row, with the benchmark NZX-50 index rising 0.1 percent to 5,157.36.

Among the leaders, Sky Network Television (NZSE: SKT.NZ - news) was up 2.3 percent to NZ$6.66 after reporting a 21 percent increase in profit on a year ago, well ahead of expectations.

The second-biggest stock, Spark Ltd, formerly Telecom NZ, reported a solid yearly profit on the back of asset sale proceeds, but adjusted underlying earnings were less hefty. The company upped its final dividend but still traded 1 percent lower at NZ$2.88.

Insurance company Tower Ltd rose 1.6 percent to NZ$1.90, a one-year high, after the Reserve Bank of NZ, which supervises the sector, cut the minimum solvency level for the company by NZ$30 million to NZ$50 million. (Editing by Kim Coghill)