Minerals lift Aust market

The Australian sharemarket closed firmly in the black yesterday, after gains in the financial sector countered weakness in retail stocks.

The S&P/ASX200 index was up 30.3 points, or 0.64 per cent, at 4786.0 points, while the broader All Ordinaries index added 27.2 points, or 0.56 per cent, to 4888.1 points.

The March share price index futures contract was 31 points higher at 4766 points, with 23,684 contracts traded.

City Index Australia senior dealer Jian Wei said the local market gained momentum in the afternoon after a flat opening.

Strong leads from overseas banks drove Australian banking stocks more than 1 per cent higher. Westpac was up 25c, or 1.11 per cent, at A$22.80, ANZ was 33c, or 1.41 per cent, higher at A$23.66, Commonwealth Bank appreciated 66c, or 1.28 per cent, to A$52.32 and National Australia Bank was up 28c, or 1.15 per cent, at A$24.61.

"We also saw investors picking up stocks in the materials sector, including Fortescue Metals, which has recovered some of its losses from last week," Wei said.

Fortescue Metals shares were up 11c, or 1.69 per cent, at A$6.60, while BHP Billiton was 21c firmer at A$44.92 and Rio Tinto put on 73c to A$85.11.

In the headlines yesterday, South Africa-focused coal miner Riversdale Mining said it was unaware of any plans for a bid to rival a A$3.9 billion takeover offer from Rio Tinto. Shares in Riversdale Mining were up 19c, or 1.16 per cent, at A$16.50.

Supermarket chain Woolworths downgraded its half-year and full-year earnings guidance, saying price deflation would wipe 3 per cent off its bottom line in 2010/11 despite more customers walking through its doors. Woolworths was down 71c, or 2.58 per cent, at A$26.76, making it the second-worst performer on the S&P/ASX 50 behind Coca-Cola Amatil, which fell 31c, or 2.65 per cent, to A$11.41.

Myer eased 7c to A$3.65 and Harvey Norman inched 1c lower to A$3.14.

Reports that British brewing company Sam Miller was interested in Foster's Group's beer business sent Foster's shares up 22c, or 4 per cent, to A$5.72, making it the best-performing stock on the S&P/ASX 50 index.

Energy stocks were mixed after crude oil prices fell on Friday. Oil Search inched 1c lower to A$6.77, but Santos gained 8c to A$13.65 and Woodside was 2c firmer at A$42.52.

Gold miner Newcrest was 32c up at A$37.03. The most traded stock by volume was Continental Coal, with 133.8 million shares traded, worth almost A$12 million. Its shares were down 0.2c, or 2.27 per cent, at A8.6c.

Preliminary turnover was 2.6 billion shares worth A$4.29 billion, with 535 stocks up, 597 down, and 399 unchanged.

- AAP