RIO, banks and jobs gives stocks sparkle
Published in the Herald Sun, February 2010
By Rebecca Le May
THE Australian share market closed higher yesterday, led by expectations of a strong profit result by Rio Tinto and rises among the major banks.
Better than expected employment data added extra zest to the market.
Rio reported, after the close of trading, a 33 per cent surge in net profit last year to $US4.872 billion ($A5.49 billion) driven by record iron ore sales and higher copper and gold production.
The benchmark S&P/ASX200 index was up 40.9 points, or 0.91 per cent, at 4554.3 points and the broader All Ordinaries index rose 42.8 points, 0.94 per cent, to 4575.8 points.
On the Sydney Futures Exchange the March share price index contract was 41 points higher at 4522 points on a volume of 24,598 contracts.
Rio Tinto jumped $1.78, or 2.62 per cent, to $69.72 while BHP Billiton was up 470, or 1.18 per cent, at $40.35.
Austock securities senior client adviser Michael Heffernan said lower than expected unemployment figures and a stronger financial sector had put a sparkle into the local market.
"The banks are really galloping at the moment and Rio is also up strongly," Mr Heffernan said.
Australia's unemployment rate fell from 5.5 per cent in December to an 11-month low of 5.3 per cent in January, defying market expectations of a rise to 5.6 per cent.
Wealth Within chief analyst Dale Gilham said he did not believe the improved jobless rate would prompt the Reserve Bank of Australia to lift interest rates next month because further signs of economic recovery were required.
"We've still got pretty average to poor retail figures," Mr Gilham said.
"A lot of employers over the past 12 months have cut things to the bone, and now that things are steady they are just putting on a few more essential people and that's about it.
"The Reserve Bank may wait until April or May to lift rates."
Commonwealth Bank gained $1.17 to $53, ANZ lifted 550 to $20.75, NAB added 140 to $24.68 and Westpac put on 230 to $22.97.
Telstra reported a 3.3 per cent drop in first half profit to $1.85 billion after more Australian households dumped their fixed-line phones for wireless or mobile telephony. Its shares slid 170, or 5.01 per cent, to a three-month low of $3.22.
James Hardie Industries NV said it was positioning itself for an expected improvement in the US housing market by spending more on research and reorganising senior management.
Shares in James Hardie finished 180, or 2.35 per cent, firmer at $7.85. Energy stocks were higher after the oil price increased overnight to nearly $US75 a barrel.
Woodside Petroleum put on $1.34 to $43, Santos strengthened 210 to $13.25 and Oil Search found 100 to $5.24.
Lihir Gold gained 40 to $2.86 while fellow gold miner Newcrest lifted 630 to $32.44.
The gold price in Sydney was $US1078.20 a fine ounce, up $US2.35 from Wednesday.
Among retail stocks, Coles owner Wesfarmers was up 410 to $28.31 and Woolworths backtracked 120 to $25.38.
The top-traded stock by volume was Samson Oil & Gas, with 240.75 million shares worth $6.13 million changing hands. Its shares fell 0.60, or 20 per cent, to 2.40.
National turnover was 2.43 billion shares worth $4.62 billion, with 652 stocks up, 352 down and
345 unchanged.