Australian stocks: Heavyweights drive market higher

PERTH - The Australian share market closed higher, with heavyweights BHP Billiton and National Australia Bank (NAB) driving the gains.

The benchmark S&P/ASX200 index was up 18.6 points, or 0.48 per cent, at 3,918.2 points, while the broader All Ordinaries index gained 16.4 points, or 0.42 per cent, to 3,910.8 points.

On the Sydney Futures Exchange at 1617 AEST, the September share price index contract was up 23 points at 3,886 points on a volume of 18,898 contracts.

CMC Markets analyst David Taylor said said the local bourse struggled to gain momentum following a mixed lead from Wall Street and flat commodities prices, excluding oil, on Friday night.

Mr Taylor said the market was focused on iron ore and copper miners on the back of news of a possible tie-up between Xstrata and Anglo-American, which would rival BHP Billiton and Brazil's Vale.

"They may also be in more contact with financial advisers and they've had a much more pronounced shift to less risky or cash investments."

"Among our heavyweight miners, there appeared to be some switching out of Rio Tinto and into Fortescue Metals and BHP Billiton," he said.

BHP Billiton advanced 55 cents, or 1.59 per cent, to $35.25, Fortescue climbed 21 cents, or 5.44 per cent, to $4.07 and Rio Tinto retreated 72 cents, or 1.42 per cent, to $50.00.

Mr Taylor said the local bourse struggled to gain momentum following a mixed lead from Wall Street and flat commodities prices, excluding oil, on Friday night.

Making headlines on Monday, NAB will become the country's biggest life insurer and investment platform provider after buying Aviva Australia Holdings for $825 million.

"Our banks are in a relatively good position compared with their overseas peers and I think we are likely to see more of this muscle flexing as the year progresses," Mr Taylor said.

NAB appreciated 39 cents, or 1.76 per cent, to $22.49.

Commonwealth Bank gained 20 cents to $38.70, ANZ inched three cents higher to $16.58 and Westpac put on two cents to $20.13.

In other news on Monday, the ExxonMobil-led Papua New Guinea liquefied natural gas joint venture is poised to finalise sales for all remaining production from the US$12.5 billion (A$15.6 billion) project that was not covered by a maiden deal in April.

Shares in the project's joint venture participants were weaker. Oil Search fell four cents to $5.48 and Santos eased 18 cents to $14.70.

Australia's second largest oil and gas producer, Woodside, dropped 31 cents to $41.30.

Resources sector contractor WDS says it expects full year earnings at the lower end of guidance but the outlook is encouraging amid an anticipated lift in coal seam gas activity.

Shares in WDS were steady at $1.35.

Broadcasting, publishing and advertising group APN News & Media completed an equity sale to raise $99 million, sending its shares four cents, or 2.71 per cent, lower to $1.435.

Among other media stocks, News Corp rose 32 cents to $13.57, its non-voting scrip was up 20 cents at $12.00 and Fairfax dropped two cents to $1.215.

The spot price of gold in Sydney at 1621 AEST was US$932.75 per fine ounce, down US$0.75 on Friday's close of US$933.50.

Among gold stocks, Lihir Gold added eight cents to $2.93, Newcrest put on 12 cents to $31.22, Newmont inched one cent lower to $5.24 and Sino Gold advanced 18 cents to $5.41.

Retail stocks were mixed. Coles owner Wesfarmers backtracked seven cents to $21.65, rival Woolworths was two cents stronger at $25.77, David Jones found 12 cents at $4.20 and Harvey Norman jumped 12 cents to $2.92.

The most-traded stock by volume was Environmental Clean Technologies, with 213.1 million shares worth $8.83 million changing hands. Its shares rose two cents, or 86.96 per cent, to 4.3 cents.

Preliminary market turnover was 2.09 billion shares worth $4.52 billion, with 434 stocks up, 675 down and 361 unchanged.

- AAP