Australian stocks: Markets at record closing peak

Australian shares resumed their rally on Wednesday to end at a record closing peak, buoyed by banks and mining companies, while steel maker Smorgon Steel jumped on a profit upgrade.

The benchmark Australian S&P/ASX 200 Index .AXJO rose 44.5 points, or 0.86 per cent, to 5,207.0 based on the latest Reuters data. It fell 0.35 per cent on Tuesday, after four straight days of new record peaks to Monday's finish.

"Yesterday's sell-off was interesting, indicating that people were prepared to take profits at these levels," said Hans Kunnen, head of investment markets with Colonial First State, Australia's top funds manager.

"That suggests we have to see some earnings upgrades before the optimism continues. But the tone is still positive and the profit-taking is at the top," he added.

Strong commodity prices have powered the index's 9 per cent rise this year, adding to 58.4 per cent gains in the previous three years.

The Reserve Bank of Australia left interest rates unchanged at 5.5 per cent for a 13th consecutive month but analysts said upbeat recent data suggested the risk of a rise over the medium-term had increased.


Stocks to watch

* Smorgon Steel Group Ltd. jumped 4.7 per cent to A$1.435 on raising its fiscal 2006 net profit guidance late on Tuesday, saying second-half earnings would be between 10 per cent and 15 per cent above the first half as scrap prices rebounded.

* John Fairfax Holdings Ltd., Australia's second-biggest newspaper publisher, lost 0.8 per cent to A$3.92 after Chief Executive David Kirk told Reuters in an interview that trading conditions in March were "mixed" and that rising newsprint prices made it difficult to keep a lid on costs.

* Macquarie Bank Ltd., Australia's top listed investment bank, rose 2.6 per cent to A$67.76 on news that Dyno Nobel Ltd.'s DXL.AX IPO will be priced 4.4 per cent above the previously set marketing band. A Macquarie Bank-led consortium is selling a 57 per cent stake in Dyno.

Dyno's bigger rival, Orica Ltd., firmed 1.2 per cent to a record A$24.14 on news of strong demand for the IPO.

* The world's top miner BHP Billiton Ltd./Plc., BLT.L added 0.8 per cent to A$29.49 and the second-biggest miner, Rio Tinto Ltd./Plc. RIO.L, firmed 2.3 per cent to A$81.51 on expectations the miners would get a price increase in iron ore negotiations with Chinese steel producers.

* Sugar producer CSR Ltd. shed 1.6 per cent to A$4.19, tracking losses in sugar prices.

* The biggest gold miner Newcrest Mining Ltd. slipped 2.1 per cent to A$23.30 and Lihir Gold Ltd. shed 3.3 per cent to A$2.67 after bullion prices fell on Tuesday. ($1=A$1.40) ($1=NZ$1.64)