Australian stocks: Market closes marginally higher

MELBOURNE - The Australian share market closed marginally higher amid directionless trading ahead of the US Federal Reserve's monetary outlook meeting in the United States.

The benchmark S&P/ASX200 index was up 10.1 points, or 0.27 per cent, at 3,807 points after drifting to a low of 3767 around midday AEST.

The broader-based All Ordinaries index edged 9.2 points higher, or 0.24 per cent, to 3802.2 points.

On the Sydney Futures Exchange, the September share price index contract was 10 points higher at 3,777 on a volume of 22,075 contracts.

Shaw Stockbroking senior dealer Jamie Spiteri said the market was largely directionless after Tuesday's three per cent slump.

"There's nothing significantly different across the market today," he said.

"You've got the market making a pause despite the fact there may be accelerated activity in the likes of Rio Tinto with its rights issue finishing here today."

Investors pushed shares in Rio Tinto 99 cents, or 2.04 per cent, higher to $49.60 ahead of its US$15.2 billion (A$19.14 billion) rights issue.

Shares in the world's largest miner, BHP Billiton, eased seven cents to $33.73.

IG Markets research analyst Ben Potter said buyers sat on the sidelines ahead of Wednesday's meeting of the US Federal Reserve.

"The absence of speculative attack is encouraging, with traders really only interested in taking profits, he said."

"Most long-term money seems happy holding to see how deep this pullback goes."

Westfield Group surged 52 cents, or 4.93 per cent, to $11.07 after its US peer, Simon Property Group, rallied overnight, he Mr Potter said.

Mr Spiteri said the banking sector had picked up from its earlier lows, which helped drive the wider market higher.

Among the major banks by 1621 AEST, Westpac eased one cent to $19.21, Commonwealth Bank gave up 19 cents, $37.03. National Australia Bank lost 24 cents to $21.45, and ANZ Banking Group fell three cents to $16.00.

Regional banks experienced more volatility, with Bank of Queensland falling 27 cents, or 3.17 per cent, to $8.24 and Suncorp Metway surging 34 cents, or 5.59 per cent, to $6.42.

Oil stocks were mixed, with Woodside Petroleum finishing $1.09 higher at $41.36, Santos retreating by 12 cents to $14.01 and Oil Search two cents lower at $5.27.

Newcrest Mining was the only major gold stock to lose ground, down 52 cents to $29.47.

Lihir Gold firmed one cent to $2.85 and dual-listed Newmont Mining gained seven cents to $5.17.

By 1625 AEST the spot price of gold in Sydney was trading at US$923.95 per fine ounce, up US$6.40 on Tuesday's close of US$917.55.

Elsewhere in the resources sector, resources investment group Lion Selection Ltd and junior gold mining hopeful Catalpa Resources Ltd agreed to merge to create a mid-tier producer of the precious metal.

Catalpa's shares finished 1.7 cents, or 19.32 per cent, higher at 10.5 cents, while Lion Selection jumped 34 cents, or 33.3 per cent, to $1.36.

By 1632 AEST the media sector presented a mixed picture, with Fairfax Media two cents softer at $1.165, while Consolidated Media fell six cents to $2.23.

News Corporation added one cent to $13.00, and its non-voting scrip advanced four cents to $11.63.

Ten Network Holdings finished one cent firmer at $1.14 after reporting a 36.6 per cent fall in earnings for the nine months to May 31 as advertising revenue slumped.

Major retailers were mostly stronger, with Wesfarmers - owner of Coles supermarkets - jumping 67 cents to $21.90, David Jones adding three cents to $4.00 and grocer giant Woolworths closing steady at $25.49.

PMP Ltd shares finished one cent at 40 cents after the the company launched a transformation plan to curb its earnings decline and return it to best practice.

Entellect Solutions was the top traded stock by volume, with over 113.53 million shares changing hands for $697,851. Its share price rose 0.2 cents, or 66.7 per cent, to 0.5 cents.

Preliminary market turnover reached 2.03 billion shares worth $5.13 billion, with 484 stocks up, 543 down and 374 steady.

- AAP