Bank gains and RIO helps propel stocks
Published in the Age, February 2010
By Rebecca Le May
THE sharemarket closed higher, led by expectations of a strong profit result from Rio Tinto and rises in bank stocks.
Better than expected employment data also put a sparkle into the market, brokers said.
Rio Tinto reported, after the close of trading, a 33 per cent surge in calendar 2009 net profit to $US4.87 billion ($A5.49 billion) driven by record iron ore sales and higher copper and gold production.
The S&P/ASX 200 put on 40.9 points, or 0.91 per cent, to 4554.3.
Rio Tinto jumped $1.78, or 2.6 per cent, to $69.72 while BHP Billiton finished 474', or 1.2 per cent, higher at $40.35.
Austock securities senior client adviser Michael Heffernan said lower than expected unemployinent 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," he 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 lead analyst Dale Gilliam said he did not believe the improved jobless rate would prompt the Reserve Bank to lift interest rates next month because it would be looking for further signs of economic recovery.
"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 appreciated $1.17 to $53 and the other majors followed it up. ANZ rose 554' to $20.75, NAB 14Q to $24.68 and Westpac 23¢ to $22.97.
Shares in Telstra retreated 170, or 5 per cent, to a three-month low of $3.22 after it reported a 3.3 per cent drop in first-half profit.
Wesfarmers rose 410. to $28.31 and Woolworths backtracked 12¢ to $25.38.
Energy stocks were higher after an overnight rise in the oil price to nearly $US75 a barrel, and goldminers firmed after the gold price edged higher.