Australian stocks: Market closes 1pc higher

MELBOURNE - The Australian share market closed higher on Thursday as investors felt a surge of optimism in the wake of a positive performance from United States markets.

At the 1615 AEDT close, the benchmark S&P/ASX200 was up 37.3 points, or 1.03 per cent, at 3,646.6, while the broader All Ordinaries gained 40.1 points, or 1.13 per cent, to 3,586.3.

On the Sydney Futures Exchange, the June share price index futures contract was up 61 points to 3663 on volume of 23,171 contracts, according to preliminary calculations.

CMC Markets head of trading James Foulsham said the rise in the market was spread broadly across most stocks.

He said the National Australia Bank had "a cracker of a day" - up three per cent - as investors saw value in the stock compared to its peers.

"There's nothing specific drawing the market higher, but there was another good day on the Dow (the Dow Jones Industrial Average index in the US)," Mr Foulsham said.

"I think there's just a bit of general confidence coming back into the market.

"People are just seeing the US market recovering gradually and some stronger days out of there, and a few people are starting to wade back in from the sidelines."

Among the major banks, National Australia Bank strengthened 62 cents, or 3.04 per cent, to $20.99, ANZ ascended 60 cents to $16.80, Westpac eased two cents to $19.60 and Commonwealth bank fell 63 cents to $34.75.

The Reserve Bank of Australia (RBA) said on Thursday that local banks were performing well despite the stress on financial systems due to the global financial crisis.

Elsewhere in the financial services sector, insurer Tower Australia Group scaraped off one cent to $2.35 after it completed the refinancing of its $100 million ANZ bank debt for another three years.

In the resources sector, global miner BHP Billiton lifted 52 cents to $33.78 as it said production has commenced from the 100,000 barrels per day Shenzi oil project in the Gulf of Mexico.

Rio Tinto picked up 77 cent to $54.70 as it said it would close its HIsmelt pig iron plant in Western Australia due to depressed global pig iron prices and a poor market outlook.

Oil and gas producer Woodside Petroleum added $1.20 to $42.20 and Santos was 39 cents richer at $17.32.

On Wall Street overnight, the Dow Jones Industrial Average rose 89.84 points, or 1.17 per cent, to 7,749.81 after upbeat data on US home sales and durable goods factory orders fuelled hopes that an economic recovery was in sight.

In the gold sector, Newmont found 21 cents at $6.46, Newcrest picked up 55 cents to $32.66 and Lihir firmed three cents to $3.22.

The price of gold in Sydney at 1622 AEDT was US$932.80 per fine ounce, up US$6.40 on yesterday's close of US$926.40.

Telco Telstra improved four cents to $3.17 and Optus-owner Singapore Telecommunications was up two cents at $2.41.

In the media sector, News Corp stepped forward six cents to $11.38, and its non-voting stock nudged up one cent to $9.90.

Consolidated Media was steady at $2.15 and Fairfax backtracked three cents to 99.5 cents.

Retailer Woolworths added 42 cents to $25.19 and Wesfarmers, which owns Coles, lost 63 cents to $18.70.

Among other stocks, airline Virgin Blue dropped 1.5 cents to 26.5 cents after it said it would cut 28 domestic flights from its daily schedule as part of its efforts to reduce costs.

Australia's biggest brick and tile producer, Brickworks, gained five cents to $9.50 as it said it was looking forward to improvements in its core business, after weathering a slowdown in the housing sector.

Pallets supplier Brambles jumped 21 cents to $5.20 as it defended its timber pallet business, saying it was still winning contracts despite one of soft drink maker Pepsi's US units moving to a rival plastic pellet provider.

Maintenance provider Programmed Maintenance Services lifted nine cents to $2.31 despite cutting its forecast earnings for fiscal 2009 and shedding staff to cope with the economic downturn.

Asset and project manager Transfield Services gained 7.5 cents to $1.975 as it appointed former Santos Ltd executive Peter Goode as chief executive.

The top-traded stock by volume was minerals explorer Admiralty Resources, with 120.79 million shares worth $2.69 million changing hands.

Admiralty was 0.7 cents higher at 2.5 cents.

Preliminary national turnover was 1.76 billion shares worth $4.92 billion, with 618 stocks up, 350 down and 258 unchanged.

- AAP