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SYDNEY - The Australian share market closed strongly in the black on gains from the financial sector following a strong lead from Wall Street over the weekend.
The benchmark S&P/ASX200 rose 83.5 points, or 1.69 per cent, to 5014.9, while the broader All Ordinaries gained 79.9 points, or 1.59 per cent to 5090.1.
On the Sydney Futures Exchange, the September share price index contract added 99 points to 4995 on a volume of 24,357 contracts.
IG Markets institutional dealer Chris Weston said financial stocks led the market higher, purely on sentiment, after US equities gained on the news that Wall Sreet financial house Lehman Brothers was now a takeover target.
"That had a knock-on effect on Australian banks and the finance companies made good gains," Mr Weston said.
ANZ gained 24 cents, or 1.53 per cent, to $15.91, National Australia Bank rose 54 cents, or 2.29 per cent, to $24.09, Commonwealth Bank added $1.27, or 3.07 per cent, to $42.65 and Westpac increased 98 cents, or 4.45 per cent, to $22.98.
The market got off to a positive start after a strong lead from Wall Street on Friday, with the Dow Jones Industrial Average putting on 197.85 points, or 1.73 per cent, to close at 11,628.06.
Westpac takeover target St George added $1.09, or 3.8 per cent, to $29.80.
Challenger Financial Services Group gained 16 cents, or 7.11 per cent, to $2.41 after the company announced its chief executive Mike Tilley would step down following a drop in full year profit.
"Tilley's departure was a shock. A change in personnel can be good for the situation," Mr Weston said.
Property-related companies gained, with Westfield rising 80 cents, or five per cent, to $16.80, Stockland adding 17 cents, or 3.57 per cent, to $4.93 and Mirvac advancing 15 cents, or 5.6 per cent, to $2.83.
Mr Weston said energy companies declined after the price of crude oil had the biggest decline in 17 years.
Light sweet crude for October delivery fell US$6.59 to close at US$114.59 a barrel on Friday in New York fter the US dollar firmed and as the world's second-largest oil pipeline in Turkey appeared set to reopen.
Santos lost six cents to $18.84, Oil Search dropped 11 cents to $5.58 and Woodside fell 36 cents to $56.64.
BHP Billiton, the world's biggest miner and also Australia's second biggest oil producer, fell 15 cents to $40.
BHP takeover target Rio Tinto gained $1.30 to $122.30 after news the federal government had approved Aluminium Corporation of China Ltd's proposal to acquire up to 11 per cent of the mining giant.
"This could be a small stumbling block for BHP because they won't be able to get a 100 per cent stake," Mr Weston said.
Gold miners declined after the spot price of the precious metal fell, and at 1640 AEST was trading at US$820.70 an ounce, down US$15.00 on Friday's local close of US$837.70 an ounce.
Newcrest lost 37 cents to $26.64, Lihir fell four cents to $2.29 and Sino Gold dropped 14 cents to $3.91.
In other company news, Goodman Fielder dropped six cents to $1.45 after a fall in full year profit to $27.7 million and expectation of little improvement in earnings this year amid the uncertain economic outlook for Australia and New Zealand.
Australia's biggest private hospitals operator, Ramsay Health Care Ltd, says it is targeting core earnings per share (EPS) growth of 10 to 12 per cent this financial year as it looks to expand in Australia and abroad. Ramsay rose 35 cents, or 3.54 per cent, to $10.25.
Transfield Services gained 48 cents to $8.18 after the company said net profit would increase by as much as 20 per cent this financial year on a record number of contracts, particularly in the US.
Pie maker Patties Foods Ltd has lifted its annual profit by 8.6 per cent and says the popularity of its products has increased even as the economy slows. The stock added 2.5 cents to 92.5 cents.
Shares in Arrow Energy fell 10 cents to $3.08 after the coal seam gas producer forecast record earnings for this financial year after delivering a rise in annual profit for 2007/08.
Online property advertising company Realestate.com.au Ltd fell two cents to $4.18 after the company lifted its profit by 48.3 per cent to $22.34 million for the year ended June 30.
Radio broadcaster Austereo Group gained one cent to $1.55 on a rise in full year profit to $48.82 million after its buoyancy in ratings helped drive an increase in advertising.
Property manager and caterer Spotless Group Ltd has vowed to hold onto its struggling coat hanger business after the company delivered a drop in earnings for the full year.
The shares gained 27 cents, or 9.34 per cent, to $3.16 as underlying earnings climbed 13.5 per cent to $57.1 million on the corresponding period in 2006/07.
ROC Oil Company has reported a first half net loss but says it has met its production targets and received record oil prices. ROC Oil added six cents to $1.17.
Centro Properties Group says its plan to recapitalise the company won't be satisfied by asset sales alone and that its efforts to raise new equity are unlikely to be implemented in December as it had hoped. The stock fell two cents to 20 cents.
Virgin Blue was the most traded stock, with 48.16 million shares worth $24.89 million changing hands.
The airline added 4.5 cents to 52.5 cents.
Market turnover was 1.14 billion shares worth $4.79 billion, with 594 stocks rising, 433 falling and 302 unchanged.
- AAP
