Australia shares hit 10-week high, ECB stimulus buoys demand

* ECB to buy 60 billion euros of bonds per month

* Australian rate cut seen more likely

* Saudi king death may mean oil rout reprieve (Adds analysis, quotes, stocks on the move)

SYDNEY/WELLINGTON, Jan 23 (Reuters) - Australian shares jumped to a 10-week high on Friday as investors cheered a larger than expected economic stimulus package from the European Central Bank, which added to growing hopes of a domestic interest rate cut.

The death of Saudi king Abdullah encouraged investors to buy energy stocks amid speculation a change of leadership in the pivotal oil-producing nation might lessen a global supply stand-off that has been driving the commodity's spot price down.

"The global easing phenomenon continues at an ECB level," said IG Markets institutional dealer Chris Weston, referring to the ECB's launch of a bond-buying drive that will pump hundreds of billions of new money into the sagging euro zone economy.

"We're seeing a situation where money has really no choice but flow into stocks."

A surprise interest rate cut in Canada earlier in the week boosted speculation the Reserve Bank of Australia may follow suit, rather than raise rates as previously forecast, if key domestic economic figures disappoint, Weston added.

The S&P/ASX 200 index rose 73.3 points or 1.4 percent to 5492.2 by 0144 GMT, its highest intraday level since Nov. 12. Australian financial markets will be closed on Monday for the Australia Day holiday.

Oil producer Santos led energy stocks higher, gaining 6 percent, while Woodside Petroleum (Other OTC: WOPEF - news) added 2.3 percent and Oil Search rose 2.5 percent. Resources contractor Worley Parsons jumped 5 percent after winning a services contract in Canada.

Miners BHP Billiton and Rio Tinto (Xetra: 855018 - news) gained 2 percent and 1.4 percent, respectively.

Smaller rival Arrium fell 3 percent after cutting production targets and shutting a mine, while commodities logistics firms Qube Holdings and MACA slumped 3.5 percent and 9 percent because of concerns they will lose business as a result.

Among banks, Westpac Banking Corp, Commonwealth Bank of Australia and National Australia Bank all added 1 percent.

New Zealand shares powered to a record high in early trading with the benchmark NZX-50 index rising 1.1 percent to 5,708.91, wiping out the previous day's drop, as a weaker local currency drew buyers.

The biggest listed company Fletcher Building (NZSE: FBU.NZ - news) was up 1.3 percent and telecommunications company Spark was 2.2 percent higher.

High yielding power companies gained, with Contact Energy (NZSE: CEN.NZ - news) up 1.8 percent at a near six-year high of NZ$6.77, while Mighty River Power, Genesis Energy and Meridian Energy were all up between 2 percent and 3 percent.

(Reporting by Byron Kaye and Gyles Beckford; Editing by Shri Navaratnam)