KEY POINTS:
PERTH - The Australian share market regained ground lost during intra day trading to finish firmer thanks to a stronger performance by financial stocks.
However, softer industrial metals and gold prices dragged the resources sector lower.
The benchmark S&P/ASX200 index was 29.8 points, or 0.55 per cent,
firmer at 5,467.3, while the broader All Ordinaries found 17.6 points, or 0.32 per cent, to 5,561.9.
At 1617 AEST, the June share price index futures contract gained 47 points to 5,468 on a volume of 22,623 contracts.
"The sharemarket has erased all of the earlier losses to finish the session in the black thanks to strong gains in the financial sector today," CommSec market analyst Elvina Simpson said.
The big four banks closed in positive territory. Commonwealth Bank added 97 cents to $42.84, Westpac lifted 65 cents to $22.25, ANZ found 32 cents to $20.40 and National Australia Bank increased 85 cents to $28.80.
Takeover target St George rose 51 cents to $30.05.
"Babcock & Brown was only one to buck the trend, closing down more than eight per cent (lower) at $9.52," Ms Simpson said.
Speculation surrounding the effect of the shutdown at Apache Energy's Varanus Island natural gas plant in Western Australia on Babcock & Brown Power might explain the drop in the company's stock today, she said.
It was reported that debt-laden Babcock & Brown expected "some short-term reduction in earnings through the period of gas supply disruption" but said it would not hamper long-term earnings for its Alinta retail business.
An announcement by Babcock & Brown on the gas shortage was expected tomorrow, Ms Simpson said.
"The market was held back by a sell-off in resource stocks earlier in the day but we saw a turnaround from energy stocks as well," Ms Simpson said.
"Queensland Gas closed up 18 cents, or 3.65 per cent, to $5.11 after being in the red for most of the day."
Woodside added 38 cents to $61.58, Oil Search lifted 12 cents to $5.85 and Santos gained 25 cents to $21.90.
At 1620 AEST, the spot price of gold in Sydney was US$871.50 per fine ounce, down US$16.10 on last night's close of US$887.60.
Accordingly, the gold producers were down. Newcrest lost 64 cents, or 2.19 per cent, to $28.63, Newmont dropped 10 cents to $5.00 and Lihir Gold fell 14 cents to $2.88.
The big diversified miners were mixed. BHP Billiton put on 18 cents to $43.44, while its rival and takeover target Rio Tinto was down $1.45 to $132.10.
Making headlines today, BHP Billiton chief executive Marius Kloppers said a combined BHP and Rio Tinto would have only a modest share of the global iron ore market and would not pose a threat to steelmakers and other commodities customers.
Rio said its mining concession at its Simandou iron ore project in Guinea was under review.
In other headlines, cost of living pressures, particularly high petrol prices, caused consumer confidence to fall to the lowest level in 16 years.
Retail stocks were mixed. Coles owner Wesfarmers gained 42 cents at $38.52, Woolworths climbed 40 cents higher to $27.15, David Jones slipped nine cents to $3.23 and Harvey Norman slipped six cents to $3.29.
Media stocks were mixed. Fairfax dipped 10 cents to $3.20 and News Corp rose 38 cents to $19.14 while its non-voting shares added 33 cents, or 1.82 per cent, to $18.45.
The top traded stock by volume was Empire Oil & Gas, with 158.13 million shares worth $4.65 million changing hands.
Its shares slipped 0.2 of a cent to 2.8 cents.
Preliminary market turnover was 1.98 billion shares worth $6.69 billion with 470 stocks rising, 786 falling and 345 unchanged.
- AAP