Australian stocks: Market closes up over 1pc

MELBOURNE - The Australian share market finished firmer led by the major miners and rebound in cyclical stocks.

At 1615 AEST, the S&P/ASX200 index was up 49.8 points, or by 1.34 per cent, at 3773.2, while the broader All Ordinaries index was up 48.1 points, or 1.3 per cent, at 3758.9.

On the Sydney Futures Exchange, the June share price index futures contract had added 30 points to 3766, on a volume of 19,231 contracts.

Macquarie Private Wealth director Martin Lakos said the market had bounced back from Thursday's selldown, recovering one-third that days' loss but on lower volume.

"We're certainly seeing some fairly nimble activity in the markets, whereby when we've seen money taken out of the market it's been ploughed back into defensives.

"But today, we've seen a rebound in some of the cyclicals," he said.

Mr Lakos said the focus had been on BHP Billiton, Rio Tinto and oil stocks.

Rio Tinto Ltd shares surged $4.28, or 7.43 per cent, to $61.88 after losing 18 per cent in the past five days.

The mining giant reaffirmed its commitment to a US$19.5 billion (A$25.68 billion) deal with Aluminum Corporation of China (Chinalco).

"There were also suggestions Rio will do a deal with BHP Billiton in iron ore, which would deliver cost savings of between 15 and 20 per cent in their iron ore division," publisher of Marcus Today stockbroking newsletter Marcus Padley said.

BHP Billiton added $1.04, or 3.22 per cent, to $33.34.

Capital raisings continued, with agricultural chemicals company Nufarm Ltd announcing it was seeking o raise $300 million through an institutional share placement to help repay debt and take advantage of expansion opportunities.

"There was $5 billion raised last week and $4 billion this week and that's put a bit of a drag on the market," Mr Padley said of the total number of capital raisings.

Australia's major lenders held up well, Mr Lakos said

"They've been sold down pretty heavily in the past. Westpac is holding up pretty well given that it's ex 56 cents dividend on Monday," he said.

By 1619 AEST National Australia Bank added 29 cents, or 1.37 per cent, to $21.47, while Westpac Banking Corporation advanced 25 cents, or 1.24 per cent, to $20.45.

Commonwealth Bank put on 35 cents, or 0.99 per cent, to $35.82 and ANZ Banking Group eased 10 cents, or 0.65 per cent, to $15.27.

Diversified financials gained ground, with AXA Asia Pacific Holdings surging 18 cents, or 4.84 per cent, to $3.90, AMP up six cents at $5.17 and QBE Insurance putting on 56 cents, or 2.79 per cent, to $20.60.

Oil stocks were stronger across the board, with Santos jumping 65 cents, or 4.82 per cent, to $14.13.

Santos said it would create one of Australia's largest forestry plantations as part of its $7.7 billion Gladstone liquefied natural gas project in Queensland.

Oil Search firmed four cents, or 0.79 per cent, to $5.10, and Woodside Petroleum put on 34 cents, or 0.79 per cent, to $43.49.

Major gold miners fell, although the local gold price advanced.

Dual-listed Newmont Mining Corporation lost 13 cents to $5.63, Lihir Gold backtracked four cents to $2.98 and Newcrest Mining eased two cents to $29.51.

At 1630 AEST, the spot price of gold in Sydney was US$926.00 per fine ounce, up US$2.55 from Thursday's local close of US$923.45.

Major retailers advanced or held steady by 1636 AEST, with grocery giant Woolworths adding 37 cents to $25.84 after announcing it will buy a 25 per cent stake in Gage Roads Brewing Co Ltd to bolster its boutique beer label options.

Wesfarmers, owner of Coles supermarkets, put on 34 cents to $22.39, while Harvey Norman was steady at $3.05 and Pacific Brands was unchanged at 80 cents.

Media stocks were mixed, with Fairfax Media gaining 2.5 cents to $1.045 after dropping earlier this week on a profit downgrade.

Consolidated Media lost three cents to $2.23, while News Corporation added 26 cents to $13.60 and its non-voting scrip gained 36 cents to $11.75.

Stockland fell 28.44 cents, or 8.99 per cent, to $2.88 after it raised $1.56 billion in new equity from institutions.

The top traded stock by volume was Universal Resources, with over 87.8 million shares changing hands for $3.2 million. Its share price was 1.3 cents, or 48.15 per cent higher, at four cents.

Preliminary national turnover reached 2.01 billion shares, traded for $4.19 billion, with 551 stocks up, 472 down and 274 steady.

- AAP