Aust market rises on bank stocks

SYDNEY - The Australian share market shunned negative leads from overseas to close higher on Wednesday, led by financial stocks.

At the close, the benchmark S&P/ASX200 index was up 29.3 points, or 0.82 per cent, at 3,609.3, while the broader All Ordinaries gained 28.9 points, or 0.82 per cent, to 3,546.2.

At 1615 AEDT on the Sydney Futures Exchange, the June share price index contract was 18 points higher at 3,622 on a volume of 22,526 contracts.

Intersuisse director of equities Andrew Sekely said some calm had returned to the financial sector and local banks were benefiting.

"There seems to be more calm coming out of the US at the present time, although that market was down this morning," Mr Sekely said.

"I think as a follow up on yesterday it does appear as though that things are setlling down, at least for the time being, and that stark pessimism has tended to be a little less with us."

ANZ gained 70 cents to $16.20, National Australia Bank added 55 cents to $20.37, Westpac rose 48 cents to $19.62 and Commonwealth Bank lifted $1.00 cents to $35.38.

Wall Street stocks fell on Tuesday as investors retreated from a strong rally a day earlier that had been fuelled by a US government plan to clean up toxic assets in the banking system.

The Dow Jones Industrial Average index closed 115.89 points lower, or by 1.49 per cent, at 7,659.97.


The materials sector was affected by profit-taking on commodities markets overnight, causing falls in base-metal prices.

BHP, the biggest company on the exchange, fell 54 cents to $33.26.

Fortescue Metals Group was flat at $2.27, and Sims Metal Management lost 30 cents to $18.33.

Rio Tinto gained 56 cents, or 1.05 per cent, to $53.93.

The Australian Competition and Consumer Commission said it would not oppose plans by the Chinese government-owned Aluminium Corporation of China (Chinalco) to buy a significant stake in Rio.

Gold miners were mixed, with Newcrest down 95 cents to $32.11, Lihir off 10 cents at $3.19, and Newmont up two cents to $6.25.

At 1621 AEDT the spot price of gold was US$927.05 an ounce, down US$15.65 on Tuesday's local close of US$942.70 an ounce.

Energy stocks were stronger, with Santos gaining 80 cents to $16.93, Woodside adding 82 cents to $41.00 and Oil Search putting on 15 cents to $5.59.

Making news, Qantas Airways said it will slash 20 per cent of its senior management jobs and maintain a salary freeze for executives as it battles against the global economic slowdown.

Qantas shares lost one cent to $1.745.

Rival Virgin Blue added one cent to 28 cents.

Construction and contract mining firm WDS Ltd cut its full-year profit forecast by as much as 22 per cent because of delays in coal seam gas works, and a provision for an onerous contract.

WDS stocks fell five cents, or 4.55 per cent, to $1.05.

Telstra lost one cent to $3.13 while its rival and Optus owner Singapore Telecommunications was flat at $2.39.

Among the retailers, Woolworths fell 11 cents to $24.77, Wesfarmers added 61 cents, or 3.26 per cent, to $19.33 and Harvey Norman rose four cents to $2.60.

Department store David Jones gained three cents to $2.98 while OrotonGroup continued its surge, adding 31 cents, or 11.88 per cent, to $2.92.

The most traded stock by volume was resource group City View Corporation, with 162.8 million shares changing hands worth a total 1.93 million, after it announced the acquisition of a Nigerian oil refinery through a joint venture.

City View stocks were up 0.4 cent, or 50 per cent, to 1.2 cents.

Preliminary market turnover was 1.65 billion shares worth $3.84 billion, with 518 stocks up, 397 stocks down and 288 unchanged.

- AAP