Australian stocks: Market closes over 2pc higher

MELBOURNE - The Australian share market closed higher on Tuesday on the back of stronger banking and resources stocks, with a sharp fall and recovery in Qantas stock one of the session's highlights.

At the 1615 AEST close, the benchmark S&P/ASX200 index had lifted 81.3 points, or 2.21 per cent, to 3,752.9, while the broader All Ordinaries index added 80.5 points, or 2.23 per cent, to 3,698.0.

On the Sydney Futures Exchange, the June share price index futures contract was up 34 points at 3,756 on volume of 21,776 contracts, according to preliminary calculations.

IG Markets institutional dealer Chris Weston said financial stocks were driving the local market on Tuesday, buoyed after United States bank Goldman Sachs posted better than expected first quarter earnings and announced a capital raising to pay back half its US$10 billion (A$13.71 billion) bailout funds from the US government.

"That's where we're seeing the strength today - investors are really coming into stocks trying to get a bit more beta (stocks moving more than the overall market) in their portfolio," he said.

Commonwealth Bank rose 96 cents to $36.56, ANZ jumped 70 cents to $17.32, National Australia Bank improved 62 cents to $22.47 and Westpac advanced 67 cents to $20.67.

In the resources sector, global miner BHP Billiton rose 59 cents to $33.04 and Rio Tinto climbed $2.94 to $56.74.

Oil and gas producer Woodside Petroleum was 63 cents stronger at $39.32 and Santos found 28 cents at $16.88.

Steel maker OneSteel was in a trading halt pending an announcement on its financial outlook. OneSteel last traded at $2.56.

National carrier Qantas closed four cents higher at $2.00 after earlier plunging to an intraday low of $1.74.

Qantas on Tuesday slashed its annual pre-tax profit forecast and flagged up to 1,750 more job cuts after a rapid decline in trading conditions.

Mr Weston said there had already been plenty of negative news in the aviation sector and more bad news had been largely anticipated by institutional investors.

"I think there was a bit of a knee-jerk reaction and people bought back because they saw a bit of value from those lows," he said.

On Wall Street overnight, the Dow Jones Industrial Average index fell 25.57, or 0.32 per cent, to 8,057.81.



Stock Move Price AMP +0.150 5.390 ANZ Bank +0.700 17.320 BHPBilton +0.590 33.040 CBA +0.960 36.560 NAB +0.620 22.470 NewsCorp +0.200 11.750 Polartech - .125 Rio Tinto +2.940 56.740 TelstraCp - 0.020 3.240 WestpacBk +0.670 20.670 Woolwrths - 0.420 25.180



Telco Telstra dipped two cents to $3.24 as confirmed it had set up a special committee to negotiate with the federal government about its national broadband network plan.

Optus-owner Singapore Telecommunications was four cents poorer at $2.35.

Among gold stocks, Newmont backtracked 15 cents to $5.85, Newcrest picked up 93 cents to $30.03, and Lihir was steady at $3.00.

Dioro Exploration soared 10 cents to 49.5 cents after Avoca Resources launched a takeover bid.

Avoca was 3.5 cents higher at $1.53.

The price of gold in Sydney at 1624 AEST was US$897.35 per fine ounce, up US$15.75 on Thursday's close of US$881.60.

Retailer Woolworths fell 42 cents to $25.18, and Wesfarmers, which owns Coles, was 57 cents richer at $19.57.

In the media sector, News Corp put on 20 cents at $11.75, and its non-voting stock added 46 cents to $10.50.

Consolidated Media hovered at $2.02, and Fairfax was up three cents at $1.11.

Among other stocks, BrisConnections, the developer of Brisbane's $3.4 billion Airport Link tunnel, was steady at 0.1 cents after a vote on winding up the company was scuttled.

The top-traded stock by volume was Qantas, with 63.49 million shares worth $118.22 million changing hands.

Preliminary national turnover was 1.52 billion shares worth $3.12 billion, with 689 stocks up, 296 down and 265 unchanged.

- AAP