Greece puts skids on telco-led advance

THE sharemarket closed slightly higher yesterday, driven by gains in the telecommunications and financial sectors.

THE sharemarket closed slightly higher yesterday, driven by gains in the telecommunications and financial sectors.

But gains remained limited as concerns over Europe's debt woes and political uncertainty weighed on investors.

The benchmark S&P/ASX 200 Index gained 11.9 points, or 0.3 per cent, to 4297.

The rise was driven by monetary easing in China but had been held back by losses in the resource sector, IG Markets strategist Stan Shamu said.

China's central bank reduced its reserve-required ratio freeing up cash to lend to stimulate the economy following disappointing import and export data last week.

"There was a lift in risk assets early on, particularly in the resource space, but unfortunately through the day the uncertainty coming from Greece weighed on most of the risk assets," Mr Shamu said.

New elections may have to be called in Greece, a prospect dreaded by the European Union as it could mean further delays to the country's promised structural reforms.

High-dividend-paying bank and telco stocks performed well.

Commonwealth was the best performer among the big banks, up $1, or 1.9 per cent, at $52.40.

ANZ was 16? higher at $22.20 and National Australia Bank was 25? higher at $24.80.

Westpac was 65? lower at $22.07 after it went ex-dividend.

The big miners were mixed but the sector finished lower. BHP Billiton was firmer for most of the day but edged off highs after an executive said he could not rule out a write-down of shale gas assets.

BHP gained 9?, or 0.3 per cent, to $34.46. Rio Tinto was 7? weaker at $61 and Fortescue Metals was down 5? at $5.34.

Telstra extended its recent rally, posting a 4?, or 1.1 per cent, gain to close at $3.64.

Also supporting local exporters was a dip in the dollar to multi-month lows below parity, helping exporters such as blood products maker CSL to gain 1 per cent.

Arafura Resources jumped 1.8 per cent after the rare-earths producer confirmed it was talking with a range of potential investors for its Nolans project.

Fertiliser and explosives maker Incitec Pivot climbed 0.3 per cent, despite a 20 per cent fall in underlying earnings.

Earnings from the company's explosives unit surprised the market, vindicating expansion and lifting investor mood.

National turnover was 1.5 billion securities worth $4.1 billion, with 401 stocks up, 551 down and 426 unchanged.

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