Australia stocks: Market closes over 2pc higher

MELBOURNE - The Australian share market closed more than two per cent higher following a strong lead from overseas and gains by major resource stocks.

At 1615 AEST, the benchmark S&P/ASX200 was up 81.7 points, or 2.19 per cent, at 3817.3, while the broader All Ordinaries increased 79.3 points, or 2.13 per cent, to 3800.9.

On the Sydney Futures Exchange, the June share price index contract was 79 points higher at 3,831 on a volume of 19,940 contracts.

Shaw Stockbroking head dealer Jamie Spiteri said the market had firmed throughout the trading session, with strength across the board.

"There is no one area of dominance. The cyclical performers across the resources sector have probably been the strongest movers here today," he said.

Major miners buoyed the local market, with Rio Tinto jumping $2.62 or 4.28 per cent to $63.77, and BHP Billiton climbing 96 cents, or 2.92 per cent, to $33.86.

Oil stocks also made solid gains, with Oil Search surging 27 cents, or 5.37 per cent, to $5.30, Woodside Petroleum advancing $1.57, or 3.67 per cent, to $44.38 and Santos edging 56 cents, or 3.94 per cent, higher to $14.76.

Crude Oil futures advanced nearly five per cent as global stock markets rallied after upbeat housing reports and escalating concerns that militant unrest in Nigeria may disrupt supplies from Africa's biggest oil producer, IG Markets research analyst Ben Potter said.

Australia's major lenders made more modest gains, with Westpac leading the charge, up 54 cents at $20.06.

National Australia Bank added 54 cents at $22.01, Commonwealth Bank of Australia firmed 65 cents to $36.15 and ANZ Banking Group gained 27 cents to $15.57.

By 1623 AEST diversified financials were stronger across the board, with insurers fearing the best.

QBE Insurance Group jumped 84 cents, or 4.15 per cent, to $21.09, while AXA Asia Pacific Holdings advanced 18 cents, or 4.75 per cent, to $3.97 and AMP Ltd gained 18 cents, or 3.47 per cent, to $5.36.

The gold sector bucked the wider trend across resources stocks, with major gold producers losing ground as the local spot price of gold fell.

At 1628 AEST the spot price of gold in Sydney was trading at US$921.50, down US$9.35 on Monday's local close of US$930.85.

Lihir Gold eased eight cents to $2.94, while Newcrest Mining lost 31 cents to $29.50 and Newmont Mining Group firmed eight cents to $5.64.

Major retailers were mostly stronger, with grocer giant Woolworths adding 45 cents to $26.25, Wesfarmers - owners of Coles - gaining 40 cents to $22.00 and David Jones surging 18 cents to $3.75.

By 1634 AEDT the media sector was mixed, with Fairfax Media lifting five cents, or 4.9 per cent, to $1.07, and Consolidated Media easing two cents, or 0.92 per cent, to $2.16.

News Corp gained 53 cents, or four per cent, to $13.78 while its non-voting scrip advanced 48 cents, or 4.17 per cent, to $11.98.

APN News & Media, which is in a trading halt, has cancelled its interim dividend and will tap the market for $99 million in order to help reduce it near $1 billion net debt.

Qantas surged 8.5 cents, or 4.71 per cent, to $1.89 and rival Virgin Blue firmed 0.5 cents, or 1.89 per cent, to 27 cents.

Goodman Group was the top traded stock by turnover, with 123.9 million shares changing hands for over $32.4 million, and pushing the share price down five cents, or 17.54 per cent, to $23.50.

Preliminary national turnover reached 1.86 billion shares, traded for a value of $3.9 billion, with 603 shares up, 411 down and 307 steady.

- AAP