Australian stocks: Market closes over 2pc up

MELBOURNE - The Australian share market closed higher on Wednesday, boosted by the major miners and big banks, and positive data on consumer confidence and housing finance.

At the 1615 AEST close, the benchmark S&P/ASX200 index had risen 89.5 points, or 2.27 per cent, to 4,024.4, while the broader All Ordinaries index was up 82.7 points, or 2.1 per cent, to 4,016.3.

On the Sydney Futures Exchange, the June share price index futures contract was 77 points higher at 4,021 on a volume of 27,825 contracts, according to preliminary calculations.

The Westpac-Melbourne Institute index of consumer sentiment, released on Wednesday, rose 12.7 per cent to 100.1 points for June - the second largest monthly increase since the survey began in 1974 and the biggest rise in 22 years.

Meanwhile, housing finance commitments for owner-occupied housing rose 0.9 per cent in April to a 14-month high as first home buyers took advantage of government grants and low interest rates.

IG Markets research analyst Ben Potter said there was plenty of interest in junior iron ore miners following the collapse of Rio Tinto's planned US$19.5 billion investment tie-up with Aluminum Corporation of China (Chinalco) and Rio and BHP Billiton's proposal to combine key iron ore operations.

"There's a lot of re-ratings on base metal players based on this BHP deal (with Rio)," Mr Potter said.

"You're also seeing all these smaller iron ore miners really becoming targets for the Chinese because the Chinalco deal has fallen through and China wants to secure some long-term iron ore pricing power."

In the resources sector, global miner BHP Billiton gained $1.20, or 3.29 per cent, to $37.70 as the company said settlements reached for most of its 2009 metallurgical coal contracts were for prices about 58 per cent lower than last year.

Rio Tinto added $2.42, or 3.43 per cent, to $73.03 as European steel makers called for EU regulators to probe plans by Rio and BHP to form an iron ore joint-venture in Western Australia.

Fortescue Metals surged 48 cents, or 15.43 per cent, to $3.59.

OZ Minerals dipped two cents to 89 cents.

OZ Minerals' shareholders at the company's annual general meeting on Thursday are expected to back a proposal by China Minmetals to buy most of the miner's assets for US$1.2 billion (A$1.49 billion), after the miner rejected at least two alternative proposals.

Oil and gas producer Woodside Petroleum put on 61 cents to $42.78 and Santos ascended 56 cents to $15.62.

Among the major banks, National Australia Bank lifted 42 cents to $22.12, Commonwealth Bank rose 97 cents to $37.96, Westpac found 44 cents at $19.79 and ANZ improved 41 cents to $16.82.

On Wall Street overnight, the Dow Jones Industrial Average index fell 1.43 points, or 0.02 per cent, to 8,763.06.

In the gold sector, Lihir was four cents higher at $3.05, Newmont reversed 19 cents to $5.55 and Newcrest picked up 15 cents to $31.80.

The price of gold at 1621 AEST was US$960.30 per fine ounce, up US$6.80 on yesterday's close of US$953.50.

Telco Telstra was four cents richer at $3.28 and Optus-owner Singapore Telecommunications eased four cents to $2.53.

Retailer Woolworths was 29 cents stronger at $26.48 and Wesfarmers, which owns Coles, was up 34 cents at $22.61.

In the media sector, News Corp was 70 cents higher at $15.30 and its non-voting scrip stepped forward 30 cents to $13.30.

Consolidated Media nudged up one cent to $2.33 and Fairfax firmed five cents to $1.29.

Among other stocks, infrastructure and engineering company Downer EDI was up 15 cents at $4.85 as it reaffirmed guidance of double-digit profit growth for the current financial year.

The top-traded stock by volume was oil and gas explorer Lakes Oil, with 102.95 million shares worth $616,464 changing hands. Lakes Oil was steady at 0.6 cents.

Preliminary national turnover was 2.16 billion shares worth $5.09 billion, with 597 stocks up, 461 down and 342 unchanged.

- AAP