By Miranda Maxwell MELBOURNE, Oct 21 (Reuters) - Australian shares rose 3.9 percent on Tuesday, bolstered by double-digit percentage gains in top miners and a rally in National Australia Bank Ltd amid signs that the global credit crunch might be easing. BHP Billiton Ltd rose 11 percent, its takeover target, Rio Tinto Ltd , gained 12 percent while NAB surged 7.3 percent. "Resources stocks have more than factored in slower Chinese growth and so they're bouncing up strongly now," said Michael Heffernan, senior client adviser and strategist at Austock. The S&P/ASX 200 index <.AXJO> closed up 160.2 points at 4,302.5, based on the latest figures, bringing gains in the week so far to 8.4 percent. The index could rise further, Heffernan said. "In a betting frame of mind I'd say we'll be up tomorrow as well, so that'll make it three in a row," he said. "It's confidence and sentiment and it's all due to the fact the government's have pumped in cash into the banks. And here (in Australia) the decline in interest rates is proving a positive catalyst." The improved sentiment boosted BHP Billiton to A$29.31 while Rio ended at A$74.36. OZ Minerals Ltd , the world's second-largest zinc miner, rose 8.9 percent to A$1.16. The company said it was weighing the closure of a zinc mine as prices continue to fall, and reported record copper output at its Sepon operation in Laos [nSYD395903]). National Australia Bank outperformed other banks, reversing early losses to rise 7.3 percent to a 10-day closing high of A$24.66. The country's top lender announced a year net profit of A$4.536 billion ($3.19 billion), and said its wholesale funding requirement this year was only A$14-19 billion, half of the previous year. Shares in ANZ Banking Corp , which reports results on Thursday, closed up 6.3 percent at A$18.85. Westpac Banking Corp Ltd , Australia's No. 4 lender, said it will cut its main home loan rate by 0.2 percent, the last of Australia's big four banks to fully pass on the central bank's 1 percentage point rate cut earlier this month. The stock rose 0.7 percent to A$23.12 [nSYU005336]. Investment fund Babcock & Brown Power Ltd jumped 17 percent to A$0.135 after it said on Tuesday a number of parties had shown interest in buying all or parts of the company as it scrambled to reduce debt. Woolworths Ltd , Australia's largest supermarket chain, rose 0.3 percent to A$28.07 after it posted a 9.6 percent increase in first-quarter sales, a faster growth rate than the fourth quarter. ($1=A$1.42) (Editing by Jonathan Standing)

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