The Australian share market closed at its strongest level in six weeks after a second consecutive firmer session, taking its lead from better performing markets offshore.
The bourse gave up some earlier ground amid soft retail sales data and after the central bank’s decision to keep interest rates steady, with the major miners outperforming the broader market, while financial stocks ended mixed.
At close, the benchmark S&P/ASX200 index was up 30 points, or 0.66 per cent, at 4,71.6 points, while the broader All Ordinaries index rose 32.1 points, or 0.7 per cent, to 4586.5 points.
What you need to know
- The Australian dollar was buying 90.83 US cents
- In the US, the S&P500 rose 24.26 points to 1125.86
- In Europe, the FTSE 100 jumped 139.09 points to 5397.11
- Oil edges towards $US82
- Gold is little changed at $US1183.85
- Dow futures are 16 points lower
On a sector-by-sector basis, materials stocks ended 1.4 per cent higher, industrials were 1 per cent higher and the financials index gained 0.5 per cent.
It was the S&P/ASX200 index’s best finish since June 22 when it closed at 4558.4.
On the Sydney Futures Exchange, the September share price index contract was 40 points higher at 4545 points, with 29,719 contracts traded.
The local bourse opened about one per cent firmer following a positive finish on Wall Street but drifted back slightly during the morning session after figures showed retail turnover increased just 0.2 per cent in June, half that of the consensus market forecast.
Stocks rallied when the Reserve Bank of Australia board said it had decided to keep official interest rates steady, but the local currency reversed direction shortly afterwards.
Mining giant Rio Tinto led the market higher closing up 2.6 per cent, or $1.85, at $73.00, while BHP Billiton climbed 68 cents, or 1.69 per cent, to $40.98.
Rio, which was the second-best performing stock on the S&P/ASX50, said it planned to spend $US170 million ($188 million) to develop the next stage of an iron ore project in Guinea.
Macquarie gains
The best performing stock on the S&P/ASX50 was Macquarie Group, which advanced for a second straight day, and finished up 4.99 per cent, or $1.88, at $39.55.
Cameron Securities client adviser Adrian Leppinus said the investment bank had benefited from some positive recommendations among some market analysts.
Macquarie was sold off heavily on Friday, losing three per cent after it warned that its core earnings divisions would not repeat their 2010 results in fiscal 2011 unless market conditions improved.
‘‘A lot of people were sort of saying that the stock was trading not much above book value and to look at buying in that mid-30 dollar region,’’ Mr Leppinus said.
‘‘There were a number of brokers that said that around those prices it was worth looking at.’’
Mixed finish for banks
ANZ ended closed up five cents at $23.37, CBA advanced 34 cents to $53.75 and Westpac was 10 cents higher at $24.30. NAB backpedalled 15 cents to $25.16.
About seven stocks rose for every five that finished in red figures on the general market.
Mr Leppinus said that despite the softer finish, market players did react positively to some early corporate earnings results.
‘‘It’s been a good day. Especially after yesterday’s strong rally. It’s good to back that up with a bit more than a half a per cent gain again today,’’ Mr Leppinus said.
Manufacturer Hills Industries said annual net profit jumped more than three hundred per cent and forecast further profit improvement in 2010/11. Hills closed up 11.06 per cent, or 24 cents, at $2.41.
The trading halt for Cougar Energy continues, as it seeks more time to speak with lenders about refinancing a key project. Cougar last traded at 7.5 cents on July 16.
The spot price of gold in Sydney was $US1182.70 per fine ounce, up $US1.02 on Monday’s close of $US1181.68.
Newcrest Mining ended down 21 cents at $33.41 and Lihir Gold was off two cents at $4.16.
The top-traded stock by volume was Pacrim Energy, with 214.63 million shares worth $2.37 million changing hands.
Pacrim was up 0.2 cents at 1.2 cents after the company provided a drilling update at its Redcliffe project in Western Australia.
Preliminary market turnover was 2.25 billion shares worth $4.97 billion, with 624 stocks up, 430 down and 339 were unchanged.
In the news this morning
Today should have been a good one for David Jones. Instead, the retailer is reeling from the launch of a $37 million lawsuit, brought by one of its staff. Read about what was said in court and comment from Ian Verrender and Ian McIlwraith.
With earnings under pressure, speculation is rising that Macquarie Group may soon have to get rid of staff.
It might have been a fat-finger moment, but when a US lawyer typed '2007' instead of '2008' it earned a blistering rap from a judge - and cost him thousands.
And the woman who stole $20 million from failed retailer Clive Peeters was trying to escape from her "depressing and bleak" life, a court has been told.
Plus, Adele Ferguson on Downer EDI, John Garnaut on Wayne Swan and China and Fan Gang on the Asian giant's national savings rate.
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AAP, with BusinessDay