Australian stocks: Stocks close higher boding well for week ahead

MELBOURNE - The Australian share market made confident gains today with leads expected to continue as the profit season swings into full gear next week.

Resource giants BHP Billiton and Rio Tinto led the way with a strong banking sector also giving weight to an improved bourse.

The benchmark S&P/ASX 200 index closed up 11.1 points at 4055.9 while the all ordinaries ended 8.8 points firmer at 4056.4.

At 1621 AEDT on the Sydney Futures Exchange, the March share price index contract was up 20 points to 4055 - a 0.9 point discount to the underlying index - on a volume of 11,747 contracts.

A narrowing of the gap between the futures and the physical markets suggested a positive outlook, Patterson Securities adviser Michael Heffernan said.

Demand for commodities and energy continued to push the resources sector, while an increase in takeovers and new listings on the horizon boosted the banks, creating a confident climate for investment.

"The whole market has a positive nature to it which should continue when more people come back off holidays on Thursday and with the start of some strong earnings (reports) over the first two weeks of February," he said.

News Corp was one of the few bleak spots on the bourse today in the wake of a weak performance in the US overnight.

The Dow Jones industrial average closed down 24.38 points at 10,368.61 and the Standard & Poor's 500 Index was down 4.12 points at 1163.75. The Nasdaq Composite Index fell 25.57 points or 1.3 per cent to 2008.70.

The ASX will be closed tomorrow for the Australia Day holiday.

- AAP