Australian stocks: Market closes moderately higher

MELBOURNE - The Australian share market gave up early strong gains to close moderately higher, buoyed by gains on resource stocks and a positive session on overseas bourses,

At 1615 AEST, the benchmark S&P/ASX200 was up 7.4 points, or 0.19 per cent, at 3890.4, while the broader All Ordinaries was up 16.2 points, or 0.42 per cent, to 3862.2.

On the Sydney Futures Exchange, the June share price index contract was trading 26 points higher at 3,890 on volume of 28,659 contracts.

Patersons Securities associate director John Curtin said an overnight rally on Wall Street spilled over into the local market, adding to positive investor sentiment.

"It's all about sentiment," he said.

"The feel is we may have seen the worst and there was economic data in the US on housing construction that was better than expected.

"That's the pointer to the US housing sector recovering ... which is the key to the US consumer."

Woodside Petroleum was the standout performer on the back of an overnight hike in the oil price, Mr Curtin said.

"The oil price broke above its March high overnight at US$54 a barrel, so if it sustains that there is upside to US$70 a barrel so there was a big rally in Woodside on the back of that."

Woodside's stock finished $1.64, or 4.05 per cent, higher at $42.13, while other major oil stocks backtracked.

Oil Search eased six cents to $5.24 and Santos Ltd dropped 18 cents to $16.91.

Rio Tinto surged $3.68, or 5.47 per cent, higher to $70.98 - its highest level since November 18 last year - while rival BHP Billiton added 66 cents, or 1.95 per cent, to $34.48.

Oz Minerals came into focus when it announced it will shrink its board if its US$1.2 billion (A$1.62 billion) asset sale to China's Minmetals is completed.

The stock finished 2.5 cents at 82 cents - its highest level since November 18.

By 1618 AEST the major lenders were mixed, with Westpac Banking Corporation finishing steady at $19.50 ahead of its interim 2009 results announcement o Wednesday.

National Australia Bank added five cents to $21.75, while ANZ Banking Group eased seven cents to $16.55 and Commonwealth Bank fell 38 cents to $36.22.

Second-tier banks and diversified financials were mostly stronger after the Reserve Bank of Australia decided to leave the official cash rate unchanged at three per cent.

Gold miners advanced on a stronger spot price of gold in Sydney which was trading at US$903.30 per fine ounce, up US$10.70 on Monday's local close of US$892.60 per fine ounce.

Lihir Gold firmed one cent to $2.96, while Newcrest Mining added $1.00, or 3.28 per cent, to $31.50 and Newmont Mining put on 20 cents, or 3.74 per cent, to $5.55.

Major retailers were mixed, with David Jones firming one cent to $3.32, Wesfarmers losing 49 cents, or 2.06 per cent, to $23.27 and Woolworths down 11 cents, or 0.42 per cent, to $26.25.

The media sector was mixed also.

News Corporation surged 80 cents, or 6.18 per cent, to $13.75, while its non-voting scrip jumped 84 cents, or 7.22 per cent, to $12.47.

Fairfax Media slumped six cents, or 5.22 per cent, to $1.09 and Consolidated Media firmed nine cents, or 4.15 per cent, to $2.26.

Telstra Corporation gave up 12 cents, or 3.61 per cent, to $3.20 and rival Singapore Telecommunications also lost ground, down one cent to $2.33.

Property developer Stockland surged 24 cents, or 7.84 per cent, to $3.30.

Rival Centro Retail Group was the top traded stock by volume, with 78.16 million shares changing hands for $4.44 million and its securities closed up 1.7 cents, or 34.7 per cent, higher to 6.6 cents.

Preliminary national turnover reached 2.25 billion shares, traded for a value of $4.66 billion, with 683 stocks up, 388 down and 287 unchanged.

- AAP