Australian stocks: Market closes flat after early gains

MELBOURNE - The Australian share market closed flat after earlier gains were whittled back despite gains in resources sector gains and a positive lead from Wall Street.

At 1615 AEST, the benchmark S&P/ASX200 index was up 3.3 points, or 0.09 per cent, at 3,877.3 points, while the broader All Ordinaries index advanced 2.9 points, or 0.07 per cent, to 3875.2 points.

On the Sydney Futures Exchange, the September share price index contract was 12 points lower at 3,849 on a volume of 19,676 contracts.

Ord Minnett private client adviser Jon Hancock said a post June 30 market malaise had produced a quiet trading day for brokers.

"All the rush has been getting clients to take up their rights in Rio and share purchase plans in ANZ," he said.

The local market was following a positive lead fromn Wall Street and stronger copper price in offshore trading overnight.

Mr Hancock said BHP Billiton and Rio Tinto rebounded on Thursday.

BHP Billiton finished up 40 cents, or 1.18 per cent, at $34.30, while Rio Tinto gained 15 cents, or 0.29 per cent, to $51.75.

Rio Tinto successfully completed the UK leg of its US$15.2 billion (A$18.78 billion) equity raising after its largest shareholder ended speculation to take up its full entitlement.

Aluminum Corporation of China (Chinalco) took up its full entitlement despite fears it may snub the offer, after a planned US$19.5 billion (A$24.09 billion) deal with Rio Tinto fell through last month.

By 1620 AEST major stocks in the gold sector were stronger, with Newcrest Mining up 92 cents at $31.20.

Dual-listed Newmont Mining gained 13 cents to $5.18 and Lihir Gold firmed five cents to $2.98.

At 1622 AEST, the spot price of gold in Sydney was US$939.50 per fine ounce, up US$7.90 on Wednesday's close of US$931.60.

Commonwealth Bank led the banking sector mostly lower, shedding 67 cents to $37.42 as funds managers reweighted their portfolios, Mr Hancock said.

ANZ Banking Group lost 12 cents to $16.13, Westpac eased 10 cents to $19.58 and National Australia Bank firmed 16 cents to $21.85.

Telstra enjoyed high trading volumes, with more than 53.2 million shares changing hands and its share price was two cents higher at $3.37, Mr Hancock said.

Major media stocks were mixed, with Fairfax Media two cents weaker at $1.17 and Consolidated Media down two cents at $2.23.

News Corporation gained 16 cents to $13.26, while its non-voting scrip advanced 15 cents to $11.60.

By 1634 AEST major retail stocks were higher, with the exception of grocer giant Woolworths which fell 17 cents to $25.99.

Upmarket store owner David Jones gained seven cents to $4.52, and clothing maker Pacific Brands jumped five cents to 90 cents.

National carrier Qantas lost two cents to $1.97, while rival Virgin Blue Holdings was steady at 30.5 cents.

Property trusts were stronger, with GPT Group jumping 2.5 cents to 50 cents and Stockland Group gaining 13 cents to $3.20.

Lakes Oil NL was the top traded stock by volume, with more than 394.3 million shares changing hands for $4.85 million. Its share price rose 0.5 cents, or 62.5 per cent, to 1.3 cents.

Preliminary national turnover reached 2.09 billion shares worth $4.2 billion, with 546 stocks up, 416 down, and 286 steady.

- AAP