Aust stocks open higher

SYDNEY - The Australian sharemarket opened 0.8 per cent higher in a broad-based rally on Monday after US stocks and metals prices gained on Friday.

At 1011 AEDT, the benchmark S&P/ASX200 index was up 37.8 points, or 0.8 per cent, at 4,744.2 while the broader All Ordinaries rose 37 points, or 0.78 per cent, to 4,759.6.

Of the stocks in the S&P/ASX 50, 45 gained.

On the Sydney Futures Exchange, the December share price index contract gained 31 points to 4,757, on a volume of 4,105 contracts.

The gold miners led the index higher, with Lihir rising eight cents, or 2.38 per cent, to $3.44, and Newcrest Mining adding 55 cents, or 1.59 per cent, to $35.12.

The spot price of gold in Sydney reached a record US$1,123.70 per fine ounce and at 1016 AEDT was at US$1,122.90 per fine ounce, up US$16.37 on Friday's closing price of US$1,106.53.

The major miners also gained, with BHP Billiton advancing 36 cents, or 0.92 per cent, to $39.37, and Rio Tinto rising $1.04, or 1.5 per cent, to $70.56.

On Friday, metals prices including gold, copper and silver gained.

Encouraging earnings news from major retailers and Walt Disney boosted US stocks.

The Dow Jones Industrial Average rose 0.7 per cent to 10,270.47, the broader Standard & Poor's 500 index gained 0.6 per cent to 1,093.48 and the Nasdaq composite index added 0.9 per cent to 2,167.88.

Macquarie Private Wealth associate director Lucinda Chan said the market had risen on the back of the late Friday rally of gold and copper.

"It's mostly a commodities-driven rally and we should hold up as long as the gold does," Ms Chan said.

"The market has opened buoyant but it may steady ahead of the retail sales in the US tonight."

Investors will be watching the US this week, where a rash of data is due including retail sales on Monday, producer prices on Tuesday, consumer prices on Wednesday and jobless claims on Thursday.

Junior gold miners also rose with Andean Resources adding nine cents, or 3.75 per cent, to $2.49, and Sino Gold gaining 22 cents, or 2.92 per cent, to $7.75.

Incitec Pivot rose after the explosives and fertiliser maker said revenue rose 17 per cent to $3.42 billion and the company said it was well placed to take advantage of the demand that will increase in the resources and food industries.

Incitec Pivot rose 11 cents, or 4.2 per cent, to $2.73 and rival Orica increased 82 cents, or 3.45 per cent, to $24.57.

"The full year sales are actually up 17 per cent and the long term fundamentals are very much intact," Ms Chan said.

Stocks to drag on the market included National Australia Bank, which said in its annual shareholder review that the company was ending the year cautiously optimistic.

NAB declined four cents to $28.85 and rival ANZ fell three cents to $22.45.

Other stocks to fall were Westfield, down three cents at $12.35, and New Zealand Telecom, down one cent at $2.

In other company news, Hills Industries increased its stake in Fielders Australia to almost 75 per cent following a rights issue and the conversion of debt to equity.

Hills added two cents to $2.07.

Breville formally rejected a takeover offer from GUD, citing an independent expert's report that has concluded the offer is neither fair nor reasonable.

Breville shares were untraded at $2.28 while GUD gained 14 cents, or 1.61 per cent, to $8.86.

Tutt Bryant shares fell one cent to 85 cents after first-half profit more than halved as the heavy equipment sales and hire company suffered from subdued demand during the economic slowdown.

Telstra plans to reduce carbon emissions for every dollar earned by at least a tenth over the next six years.

Telstra added two cents to $3.32.

Babcock and Brown Infrastructure denied speculation that UK-based lender Royal Bank of Scotland might put up an alternative recapitalisation proposal to that due to be voted on at security holder meetings on Monday.

The stock is suspended, last trading at 3.5 cents.

The most traded stock by volume was Lakes Oil with 99 million shares worth $945,632 changing hands.

Lakes Oil shares declined 0.2 cent, or 20 per cent, to 0.8 cent.

Market turnover was 878 million shares worth $895 million, with 552 stocks up, 254 down and 327 steady.

- AAP