Australian stocks: Market continues climb

SYDNEY - Financial stocks drove Australian shares to a positive close for a third consecutive trading day after gains in financials overseas showed some confidence in the troubled sector was returning.

The benchmark S&P/ASX200 index gained 103.5 points, or 3.09 per cent, to close at 3,451.9, while the broader All Ordinaries index added 96.1 points, or 2.91 per cent, to 3,393.4.

On the Sydney Futures Exchange, the March share price index futures contract was 90 points higher at 3,460 on a volume of 163,751 contracts.

"The banking sector has been the big winner," Cameron Securities client adviser Adrian Leppinus said.

"We had a distinct lead overseas with banking stocks rising."

Mr Leppinus said gains in stocks including Barclays, Citi and Bank of America probably gave investors confidence to reenter the market.

"Confidence has returned a little bit so people want to get into quality names."

Macquarie rose $1.81, or 9.03 per cent, to $21.85.

"Macquarie is a very market sensitive stock and its taking its lead from overseas," Mr Leppinus said.

QBE led the insurers higher, rising 96 cents, or 5.6 per cent, to $18.11.

The major banks all gained, with National Australia Bank increasing 58 cents to $18.93, Commonwealth Bank adding $1.47 to $32.47, ANZ rising 38 cents to $14.43 and Westpac gaining 58 cents to $17.71.

Mr Leppinus said the property sector had been hit hard and was now attracting back capital.

Stockland gained 29 cents, or 10.36 per cent, to $3.09, Mirvac added seven cents, or 8.19 per cent, to 92.5 cents and Westfield rose 34 cents, or 3.34 per cent, to $10.53.

The big miners were stronger, with market leader BHP Billiton up 90 cents, or 2.9 per cent, at $31.90 and Rio gaining $1.26, or 2.48 per cent, to $52.01.

Coal miners also gained as the price of the commodity rose.

Energy Resources of Australia rose $1.19, or 5.95 per cent, to $21.19, Felix Resources added 48 cents, or 6.72 per cent, to $7.62 and Centennial Coal rose 11.5 cents, or 6.46 per cent, to $1.895.

In company news, GrainCorp restructured its storage and logistics and ports businesses to take advantage of opportunities that emerged following the ending of the wheat export monopoly last year. GrainCorp shares added one cent to $5.71.

Premier Investments reported a sharp rise in first half profit and maintained its guidance for the full year, while warning that the retail trading environment remains difficult.

Shares in the retail investment vehicle gained 35 cents, or 9.51 per cent, to $4.03.

Network Ten's majority owner, Canwest Global Communications, declined to comment on a newspaper report that it had started informally marketing its stake in the Australian television network to local investors.

Ten shares were up five cents, or 6.94 per cent, to 77 cents.

AXA Asia Pacific shares entered a trading halt after last trading at $3.22 after announcing plans to raise at least $660 million by selling new equity to existing shareholders to increase cash to meet regulatory requirements and repay debt.

At 1641 AEDT, the spot price of gold in Sydney was US$920.35 per fine ounce, down US$6.20 on Monday's local close of US$926.55.

Newcrest gained 39 cents to $32.10, Lihir Gold rose seven cents to $3.04 and Newmont Mining declined three cents to $5.77.

The most traded stock was Telstra Corp, with 141.39 million shares worth $425.85 million changing hands.

Telstra shares added two cents to $3.03.

Preliminary market turnover was 1.65 billion shares worth $3.79 billion, with 601 stocks up, 310 down and 266 unchanged.

- AAP