Australian stocks: Market closes at one-month high

SYDNEY - The Australian share market closed at a one-month high, boosted by financial stocks after US Federal Reserve-inspired Wall Street rally.

The benchmark S&P/ASX200 gained 33.9 points, or 0.98 per cent, to close at 3480.2, the highest since February 16, while the broader All Ordinaries increased 30.6 points, or 0.9 per cent, to 3416.8.

On the Sydney Futures Exchange the June share price index contract was trading up 12 points at 3490 on a volume of 28,422.

The March contract, which expired at noon on Thursday, closed five points lower at 3464 on a volume of 9,953 contracts.

"We're following the lead from overseas," Reynolds Stockbrokers director Markus Mueller said.

"The American financials were very strong and the Federal Reserve's playing all in."

Most of the insurers and Macquarie Croup led the local financial stocks higher.

QBE gained $1.09, or 5.83 per cent, to $19.79, AMP added 24 cents, or 5.56 per cent, to $4.56, and Macquarie jumped $1.97, or 8.71 per cent, to $24.60.

The retail banks mostly gained. Commonwealth Bank added $1.30, or 3.98 per cent, to $34 after it said it had raised $865 million from its investors under a share purchase plan.

National Australia Bank rose 31 cents to $19.50, Westpac gained 46 cents to $18.20 but ANZ lost four cents to $14.76.

US stocks gained on Wednesday in volatile trade after the us Fed said it will pump about US$1 trillion (A$1.47 trillion) into the economy, including the purchase of up to US$300 billion (A$440.66 billion) of long-term Treasury securities over the next six months, as it works to revive the housing market and halt a punishing recession.

The Dow Jones Industrial Average climbed 1.23 per cent to 7,486.58, the Nasdaq composite gained 1.99 per cent to 1,491.22 and the broad-market Standard & Poor's 500 index rallied 2.09 per cent to 794.35.

Mr Mueller said the recent gains in stocks followed a severe correction, and it was too early to tell whether the rally would last.

The S&P/ASX 200 reached an almost six-year low on March 6.

"People just gave things away," he said.

"There's some normality coming back in (although) there's probably plenty of icebergs out there."

Gold stocks gained the precious metal rose in value.

Newcrest added $1.72, or 5.48 per cent, to $33.09, Lihir rose 17 cents, or 5.5 per cent, to $3.26 and Newmont gained 38 cents to $5.88.

The spot price of gold was US$930.10 an ounce at 1629 AEDT, up US$21 on Wednesday's local close of US$909.10.

BHP, the biggest company on the market, added 17 cents to $31.25 after pricing US$3.25 billion (A$4.77 billion) of medium to long-term global bonds in two tranches.

Rio Tinto fell $2.01, or 4.23 per cent, to $45.49 following Wednesday's slump on growing doubts whether the investment deal with Chinalco will be approved by the government.
In other company news, the competition watchdog is taking Telstra to court, accusing it of blocking rivals from accessing its copper wire network.

Telstra shares fell seven cents to a record low $2.96. The stock was the most traded stock by volume, with 165.65 million shares changing hands, worth $495.45 million.

David Jones gained 14 cents to $2.84 even though analysts said it faced deteriorating conditions and heavy cost-cutting.

Junior iron ore producer Atlas Iron signed the last of its available iron ore into a long-term offtake agreement with an undisclosed Chinese steel mill. The shares fell 1.5 cents to $1.24.

Drugs maker and distributor Sigma Pharmaceuticals is likely to report an annual profit at the lower end of its guidance, analysts say. Sigma fell half a cent to 96 cents.

Elsehwere, Mineral Deposits says it expects to produce about 160,000 ounces of gold from its Sabodala mine in Senegal this year, after pouring the first bars at the operation.

Its stock added three cents to 68 cents.

Preliminary market turnover was 2.59 billion shares worth $8.66 billion, with 531 stocks up, 359 stocks down and 289 unchanged.

- AAP