Australian stocks: Market closes in poisitve territory

PERTH - The Australian share market closed in positive territory for the second consecutive day on Wednesday, with the industrial and materials sectors providing support but a late sell-off in Rio Tinto capping the bourse's gains.

The benchmark S&P/ASX200 index was up 12.7 points, or 0.34 per cent, at 3,801.1, while the broader All Ordinaries index advanced 13.7 points, or 0.36 per cent, to 3,795.3.

On the Sydney Futures Exchange at 1615 AEST, the June share price index contract was 23 points higher at 3,800 on a volume of 24,177 contracts.

CommSec market analyst Juliette Saly said there was a sell-off in Rio Tinto stock towards the end of trade despite it sealing better than expected iron ore price cuts with Japan's Nippon Steel on Tuesday.

The mining giant retreated $1.11, or 1.7 per cent, to $64.35 while rival BHP Billiton strengthened 36 cents, or 1.05 per cent, to $34.65.

Ms Saly said insurance stocks also weighed on the market, after Suncorp-Metway warned its full-year 9 bad debts charge would rise by more than expected.

Shares in Suncorp-Metway slipped 16 cents, or 2.62 per cent, to $5.95 while QBE Insurance dropped 69 cents, or 3.42 per cent, to $19.49.

"We're also seeing some of the banks turn negative in the wake of ANZ's capital raising, with Westpac particularly hit hard," Ms Saly said.

ANZ shares were in a trading halt on Wednesday after the bank said it would raise $2.85 billion by selling new shares to investors to strengthen its balance sheet as it bids for some of Royal Bank of Scotland's Asian assets.

ANZ last traded at $15.57.

Westpac shed 34 cents, or 1.78 per cent, to $18.80 while Commonwealth Bank backtracked 32 cents to $35.13.

National Australia Bank gained 10 cents to $21.74, despite news it was likely to be the target of a class action over an alleged delay in writing down a $1.2 billion portfolio of collateralised debt obligations.

Energy stocks were stronger after the crude oil price hit a six month high of US$62.45 a barrel overnight on Tuesday.

Woodside rose 12 cents to $42.62, Santos added 22 cents, or 1.54 per cent, to $14.47 and Oil Search appreciated 11 cents, or 2.08 per cent, to $5.41.

The sector was also boosted by Caltex, which announced it would buy 302 Mobil service station sites around Australia for $300 million.

Caltex shares soared 88 cents, or 8.3 per cent, to $11.48.

At 1621 AEST, the spot price of gold in Sydney was US$948.75 per fine ounce, down US$3.05 on Tuesday's local close of $US$951.80.

Gold stocks were mixed. Newcrest put on 24 cents to $32.24, Newmont was two cents higher at $5.95 but Lihir Gold was three cents weaker at $3.17.

Among retail stocks, Coles owner Wesfarmers was steady at $20.92, Woolworths sank 33 cents to $25.45, David Jones lifted seven cents, or 1.98 per cent, to $3.60 and Harvey Norman appreciated eight cents, or 2.8 per cent, to $2.94.

News Corp was a strong performer among media stocks, jumping 58 cents, or 4.39 per cent, to $13.80 while its non-voting shares leapt 56 cents, or 4.87 per cent, to $12.05.

The top traded stock by volume was GPT Group, which announced it had sold a shopping centre in Perth's western suburbs for $100 million to Australasian Property Investments, with 154.02 million of its stapled securities worth $78.53 million changing hands.

Its stapled securities were down 1.5 cents, or 2.91 per cent, to 50 cents.

Preliminary national turnover reached 2.11 billion shares, worth $4.39 billion, with 593 stocks up, 399 down and 343 unchanged.

- AAP