CANBERRA, Feb 1 (Reuters) - Manufacturing activity in Australia fell sharply in January amid global economic turbulence and fears of another inteest rate rise, a private survey showed on Friday.

Tasmania's Housing Industry Association expects official interest rates will rise again next week by 0.25 per cent.

An Australian company is working directly with the Chinese navy to develop catamarans capable of firing missiles, an international policy institute says.

Manufacturing activity has slipped for the first time in more than 18 months with volatility in financial markets blamed for the decline.

SYDNEY, Feb 1 (Reuters) - The Australian dollar kept most of its offshore gains against the U.S. currency and the Japanese yen on Friday after a rebound in stock markets revived appetite for risk and higher yielding currencies.

SCV Group has warned that it may have to lower its earnings guidance after its takeover of the management rights to Village Life properties hit snarls.

The Commonwealth Workplace Ombudsman has started a new investigation into the use of Australian Workplace Agreements (AWA) at the University of Wollongong.

SYDNEY, Feb 1 (Reuters) - Suncorp-Metway Ltd SUN.AX, Australia second-biggest car and home insurer, raised its synergy target from last year's purchase of Promina Group, but cut its insurance trading margin due to unfavourable weather events in the first half.

A group of businesses with interests in rural and regional Australia says it fears the bush will be forgotten in the national push to improve infrastructure.

MELBOURNE, Feb 1 (Reuters) - Australian shares rose 1.5 percent in early trade on Friday, buoyed by top miner BHP Billiton Ltd. BHP.AX and recoveries in stocks slammed earlier this week as investors sold off shares to appease their lenders.

A stockbroker says the unloading of aged care assets by the financially troubled Gold Coast tourism and funds management group MFS is the start of a 'fire sale'.

Prime Minister Kevin Rudd says the Federal Government does not support Australian Federal Police (AFP) Commissioner Mick Keelty's call for a media blackout in terrorism cases.

The mining and construction company MacMahon Holdings, says it will continue underground development work at BHP's Olympic Dam mine in South Australia's far north for another 18 months.

MELBOURNE, Feb 1 (Reuters) - Australian shares rose 2 percent on Friday, rising for a second straight day, as recently battered financial sector stocks gained after U.S. bond insurer MBIA Inc MBI.N reassured investors about its stability.

Reassurances have been given on the financial health of a major bond insurer in the United States, helping Wall Street post a solid recovery after early losses.

Investment manager AXA says that it has barred redemptions from two of its main UK property funds for up to six months.

MELBOURNE, Feb 1 (Reuters) - Australian shares are set to open slightly higher, buoyed by the top miners and reassurances from stock broker Tricom that it does not expect further forced selling of shares which had hurt the market this

Prime Minister Kevin Rudd says he has given the union movement a blunt message about the need for everyone to fight inflation.

Just days after the James Nelson Mill was thrown a financial lifeline by the Tasmanian Government, a second Launceston textile mill has lost a major contract.

LONDON (AFP) - European stock markets closed generally lower Thursday, after a mixed performance in Asia, with investors anxious about the financial health of US bond insurers as well as the broader US economy.