Gerry Harvey, Rio Tinto push Aussie market higher

MELBOURNE - Bullish comments over Christmas sales by retailer Gerry Harvey and a big push into Rio Tinto shares have nudged the Australian share market higher.

At the 1615 AEDT close, the benchmark S&P/ASX200 index was up 31.2 points, or 0.67 per cent, at 4717, while the broader All Ordinaries was up 32.5 points, or 0.69 per cent, at 4739.2.

On the Sydney Futures Exchange, the December share price index contract was 28 points higher at 4,729 points, on volume of 17,360 contracts.

Ord Minnett private client adviser Jon Hancock said Mr Harvey's expectation of bumper Christmas sales sent Harvey Norman shares surging along with most of its rivals.

"That's flowed on to David Jones, Wesfarmers, Woolies and JB Hi Fi," Mr Hancock said.

On Sunday, Mr Harvey told reporters: "Our sales this year are going to be an absolute record, this is going to be the biggest Christmas we have ever had, we are going to break all records."

Harvey Norman shares finished 22 cents, or 5.19 per cent, higher at $4.46 while David Jones climbed 13 cents, or 2.3 per cent, to $5.78, and Wesfarmers jumped 50 cents or 1.71 per cent to $29.75.

Woolworths advanced eight cents, or 0.29 per cent, to $28.08 and JB Hi-Fi lifted 80 cents, or 3.6 per cent, to $23.00.

Stronger iron ore volumes expected by Rio Tinto, along with BHP Billiton's comments that it was unlikely to launch a second bid for its rival, prompted a $2.56 or 3.59 per cent jump in Rio Tinto's shares to $73.78, Mr Hancock said.

BHP Billiton's shares advanced 43 cents, or 1.07 per cent, to $40.46.

Mr Hancock said investors also made a big switch out of banks on the perception the Reserve Bank of Australia will decide in December to leave the official cash rate on hold.

"(People think) they will push back when the rate rises are going to occur, probably until February or March," he said.

The financials sector finished down 0.01 per cent.

ANZ Banking Group added 15 cents, or 0.69 per cent, to $21.90 and Commonwealth Bank firmed four cents to $52.80.

But Westpac fell five cents to $24.15 and National Australia Bank eased 29 cents, or 1.01 per cent, to $28.40.

Oil stocks were mixed with Oil Search easing one cent to $5.86, Santos down one cent at $15.01 and Woodside Petroleum firming two cents to $48.71.

Gold stocks continued to advance as the spot price of gold in Sydney touched US$1163.00 per fine ounce at 1626 AEDT, up US$17.90 from Friday's closing price of US$1,145.10.

"It's a fear of where else to put your money," Mr Hancock said.

"There's been a massive swamping of the equity markets with money over the last six months and that at some point has got to ease and gold is another alternative investment."

Lihir Gold jumped 12 cents, or 3.35 per cent, to $3.70, Newcrest Mining rose $1.16 or 3.24 per cent to $37.00 and Newmont Mining firmed three cents to $5.75.

Elsewhere, shares in building products supplier James Hardie Industries NV surged 47 cents, or 6.35 per cent, to $7.87 after the company reported a net loss in the first half of fiscal 2010.

But James Hardie said full year earnings still should enable it to contribute to its asbestos compensation fund.

Media stocks were mixed, with heavy turnover in Fairfax Media of over 10.6 million shares leaving the share price steady at $1.66.

Rival News Corp lost 25 cents, or 1.59 per cent, to $15.49 while its non-voting scrip fell 15 cents, or 1.13 per cent to $13.17.

Qantas gained three cents to $2.72 while competitor Virgin Blue Holdings eased one cent to 51.5 cents.

Telstra nudged three cents higher to $3.33 on turnover of over 32.7 million shares.

But the most traded stock by volume was Drillsearch Energy with over 228.6 million shares changing hands for a value of $22.2 million.

Drillsearch's shares finished 1.7 cents, or 20.48 per cent, higher at 10 cents on drilling success at its joint venture project with partner Santos.

Preliminary national turnover reached 2.75 billion, worth $3.6 billion, with 629 stocks up, 479 down and 331 steady.

- AAP