Australian stocks: Market closes 1.5pc higher

MELBOURNE - The Australian share market has closed 1.5 per cent stronger after gains from big miners and changes in the way banks value toxic assets in the US.

At the close, the S&P/ASX200 was 55.4 points, or 1.51 per cent, higher at 3735.6, while the broader All Ordinaries gained 51.8 points, or 1.43 per cent to 3674.

At 1615 AEDT on the Sydney Futures Exchange, the June share price index contract was 70 points higher at 3746 on a volume of 23,024 contracts.

CMC Markets senior trader Matt Lewis said changes to the Financial Accounting Standards Board in the US helped push the market higher.

"The fact that there is talk of changing the mark-to-market accounting rules in the US has definitely given a boost to the financial sector, in particular today," Mr Lewis said.

"There is strength across the board. It was a bit of a perfect storm coming into the day, we saw all the base metals stronger ... so that has also given a lift to the mining giants," he said.

Commonwealth Bank added 71 cents to finish at $36.06, ANZ rose $1.06 to $17.40, Westpac picked up 50 cents to $20.40 and National Australia Bank gained $1.34 to $22.84.

The market got off to a positive start, opening 1.67 per cent higher after gains on Wall Street, with the Dow Jones Industrial Average putting on 216.48 points, or 2.79 per cent, to close at 7978.08.

The big mining companies ended the day stronger, with BHP Billiton increasing $1.22, 3.65 per cent, to close at $34.60 and rival Rio Tinto gaining $2.44, or 4.21 per cent, to $60.40.

Fortescue Metals dropped 11 cents to $2.50 after the Australian Securities and Investments Commission's (ASIC) said legal action against the iron ore miner and chief executive Andrew "Twiggy" Forrest would begin in the Federal Court next week.

The retailers ended the day mixed.

Harvey Norman increased 10 cents, or 3.76 per cent, to $2.76 and Woolworths shares fell marginally, down 12 cents to $24.88.

Upmarket retailer David Jones fell one cent to $2.85 and Wesfarmers fell 37 cents to close at $19.34.

Allco Equity Partners put on 20 cents to finish at $2.15 after proposing to return cash to shareholders, suspend new investment activity and put the future of the company to a vote in two years.

Qantas rose rose four cents to $1.85. The airline said on Friday it would boost its defined benefit pension plan by $66 million over the next three years after heavy falls in asset markets.

The media sector ended mixed.

News Corp shares put on 22 cents to $11.95 and the non-voting scrip was up 29 cents at $10.56.

Fairfax Media fell 0.5 cents to end on $1.06 and Consolidated Media were off seven cents at $2.00.

The energy sector was up after crude oil prices rose overnight.

Woodside increased to $39.88, a rise of 78 cents and Santos rose 52 cents to $17.44.

Oil Search finished up 20 cents at $5.29.

Arrow Energy increased nine cents to $2.96 after acquiring a stake of up to $400 million in the Tipton West venture in Queensland from Beach Petroleum.

Beach Petroleum shares fell four cents to 87 cents.

At 1635 AEDT the spot price of gold was trading at US$902.10 an ounce,a fall of US$24.50 fron Thursday's local close of US$926.60.

Gold miners also dropped during Friday's trade.

Newcrest shares fell $2.42 to $30.79, Lihir dropped 28 cents to $3.10 and Newmont was off 16 cents to $6.56.

Newsat was the most traded stock by volume, with 127.86 million shares changing hands worth $383,640.

Shares in the technology group fell to 0.1 cents to 0.3 cents.

Preliminary market turnover reached 2.14 billion shares worth $4.69 billion, with 650 stocks up, 358 down and 275 unchanged.

- AAP