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MELBOURNE - The Australian share market closed around one per cent higher, with a stronger resources sector helping to offset falls in major bank stocks caused by capital raisings.
At 1615 AEDT, the benchmark S&P/ASX200 index was 36.4 points or 1.01 per cent higher at 3640.7, while the
broader All Ordinaries was up 39.6 points, or 1.12 per cent, at 3,573.3.
On the Sydney Futures Exchange, the December share price index contract was up 33 points at 3,648 on a volume of 27,928 contracts.
Alternative moves by the resources and banking sectors came about as the banking sector absorbed recent placements by Westpac and Commonwealth Bank of Australia (CBA), Shaw Stockbroking head dealer Jamie Spiteri said.
"That's had a dampening effect on the banking sector, and contrary to that the resources sector was very strong".
"Some believe it identifies the extended short positions which have been opened up in that resources sector - some of those positions are forced closed as prices are firming dramatically here today," he said.
Rio Tinto and Oil Search were the standout performers, surging over 11 per cent despite weaker commodity prices in London overnight.
Rio Tinto finished up $4.05, or 12.14 per cent, to $37.40 and Oil Search rising 48 cents, or 11.21 per cent, to $4.76.
BHP Billiton jumped $1.91, or 6.71 per cent, to $30.36, while oil company Santos added $1.00 or 7.75 per cent to $13.90 and Woodside Petroleum firmed $1.27, or 3.92 per cent, to $33.70.
"Significant weakness across the resources sector in recent weeks is being reversed as stocks are reacting to oversold situations," Mr Spiteri said.
The absence of a price set on the $750 million placement by CBA to Merrill Lynch helped drag down the stock to a five-year low.
CBA said it would use the proceeds to redeem its PERLS II securities in March 2009.
CBA finished $1.50, or 5.00 per cent weaker, at $28.50 - its lowest since December 2003.
"CBA has been sold down three times by fund managers wanting cash in order to buy the others," Marcus Padley of the Marcus Today newsletter said.
"National Australia Bank (NAB) has raised $3 billion, QBE $2 billion and Westpac $2.5 billion - you want to be at the front of that queue not the back," he said.
Westpac's shares fell $1.51, or 8.45 per cent, to $16.37, while NAB lost 30 cents to $19.60 and ANZ Banking Group firmed five cents to $14.15.
By 1615 AEDT gold miners were mixed, with Lihir Gold easing four cents to $2.26 and Newcrest Mining up 36 cents to $28.59.
The spot price of gold in Sydney was trading at US$778.40 per fine ounce, up US$6.15 on Tuesday's close of US$772.25.
Retailers were mixed, with upmarket department store chain David Jones adding 12 cents to $3.01, Harvey Norman easing six cents or 2.54 per cent to $2.30 and The Reject Shop slipping one cent to $9.38.
In news today, the board of MYOB Ltd said it intended to accept a higher bid from a private equity consortium that had its original offer rejected by the software company.
MYOB's shares finished 8.5 cents, or 8.76 per cent, higher at $1.05.
Media stocks were softer, with Consolidated Media losing five cents to $2.06 and News Corporation down three cents to $13.13.
News' non-voting scrip gained nine cents to $12.49.
Publisher Fairfax Media Ltd on Wednesday named Brian McCarthy as its new chief executive and managing director, as had been widely expected.
The Fairfax board also declared its "unanimous support" for chairman Ron Walker.
The stock was steady at $1.505.
stocks were weaker with national carrier Qantas Airways easing one cent, or 0.42 per cent, to $2.39 and Virgin Blue Holdings down 1.5 cents, or 5.08 per cent, to 28 cents.
At 1644 AEDT, the most traded stock was Amcom Telecommunications, with 101.12 million shares worth $9.6 million changing hands.
Its shares were up 1.1 cents, or 11.1 per cent, at 11 cents.
Market turnover was 1.2 billion shares, worth $4.5 billion, with 403 stocks up, 430 down and 318 unchanged.
- AAP