Iron ore players help forge a strong finish

THE sharemarket finished stronger yesterday, boosted by the resource sector, with iron ore players Fortescue Metals Group and Atlas Iron the standouts.

By InvestSMART · 20 Mar 2012

By InvestSMART ·
20 Mar 2012

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THE sharemarket finished stronger yesterday, boosted by the resource sector, with iron ore players Fortescue Metals Group and Atlas Iron the standouts.

At the close, the benchmark S&P/ASX 200 Index was up 14.6 points, or 0.34 per cent, at 4290.8.

After a strong start, the market eased from its intraday highs to below the key technical level of 4300 points on the S&P/ASX 200, RBS Morgans private client adviser Craig Walker said.

"That 4300-level is a key ceiling, and if the market can close above it, that would attract a few investors into the market," he said.

A production fault on a railway at a mine owned by Brazil's Vale boosted local iron ore stocks, Mr Walker said.

"There was an issue that may affect the short-term supply of iron ore," he said. "That followed weakness on Friday due to potential cyclone activity in the west, and Fortescue and Atlas have made considerable gains."

Fortescue Metals Group surged 17?, or 2.9 per cent, to $5.98, while Atlas Iron jumped 11?, or 3.8 per cent, to $3.04. BHP Billiton gained 38?, or 1.1 per cent, to $35.35, and Rio Tinto advanced 73?, or 1.1 per cent, to $65.85.

Oil majors were mixed, with Oil Search climbing 2? to $6.96, Santos firming 7? to $14.53 but Woodside Petroleum slipping 23? to $34.97.

Among financials, insurers were strong, with QBE Insurance rising 45?, or 3.4 per cent, to $13.59 before its planned capital raising.

Insurance Australia Group added 6?, or 1.8 per cent, to $3.41 and AMP advanced 7?, or 1.7 per cent, to $4.27.

The big four banks were mostly higher, with the exception of National Australia Bank, which closed 3? lower at $24.15.

Stocks that lost ground included Telstra, which was down 3? at $3.23. Woolworths fell 64? to $25.03 and PaperlinX dipped 0.5?, or 4.4 per cent, to 11?.

David Jones shares have been placed in a trading halt as the department store chain exercises caution about corporate disclosure rules before releasing its first-half results.

Market watchers expect the upmarket retail chain to post a 15 to 20 per cent fall in net profit when it reports its latest earnings tomorrow.

Sharemarket darling Campbell Brothers is expanding its food-testing operations with a $39 million acquisition in Britain and Ireland. Campbell's shares gained $1.23 to $63.01.

The price of gold in Sydney closed at $US1661.58 ($A1567) an ounce, up US49?. National turnover was 2.13 billion shares worth $4.53 billion, with 546 stocks up, 471 down and 379 unchanged. AAP

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Frequently Asked Questions about this Article…

Why did the ASX finish stronger today and what drove the market rally?

The sharemarket finished stronger, helped by a bounce in the resource sector. The S&P/ASX 200 index rose 14.6 points (0.34%) to 4,290.8, with gains led by iron ore and other mining stocks. A production fault on a Vale railway and earlier cyclone concerns also tightened near-term iron ore supply, supporting prices and miner shares.

How did iron ore stocks like Fortescue Metals Group and Atlas Iron perform?

Iron ore players were standouts: Fortescue Metals Group rallied to about $5.98 and Atlas Iron climbed to about $3.04, each making noticeable gains as the market reacted to potential short-term supply issues in iron ore.

What is the significance of the 4,300 level on the S&P/ASX 200 for investors?

According to market advisers, the 4,300 mark is a key technical ceiling for the S&P/ASX 200. If the index can close above 4,300 it may attract additional investor interest and signal stronger market momentum.

How did the big miners BHP Billiton and Rio Tinto move, and why does that matter to everyday investors?

BHP Billiton rose to about $35.35 and Rio Tinto advanced to about $65.85, each up roughly 1.1%. Big miners often drive market sentiment and index performance, so their gains can support broader market strength and influence portfolios with exposure to Australian mining stocks.

What happened with oil and gas majors on the day?

Oil majors were mixed: Oil Search climbed to around $6.96, Santos firmed to about $14.53, while Woodside Petroleum slipped to roughly $34.97. These divergent moves show commodity- and company-specific news can have different impacts across the sector.

Did financial and insurance stocks show any notable moves worth watching?

Yes — insurers were generally strong. QBE Insurance increased to about $13.59 ahead of a planned capital raising, Insurance Australia Group rose to about $3.41, and AMP advanced to around $4.27. The big four banks were mostly higher, though National Australia Bank closed lower at about $24.15.

Why was David Jones placed in a trading halt and what are profit expectations?

David Jones shares were placed in a trading halt while the department store chain made sure it complied with corporate disclosure rules before releasing first-half results. Market watchers expect David Jones to report a 15%–20% fall in net profit when it announces earnings.

Were there any other corporate or market indicators investors should note from the session?

Yes. Campbell Brothers announced a roughly $39 million acquisition in Britain and Ireland and saw its shares rise to about $63.01. Gold in Sydney closed at roughly US$1,661.58 (about A$1,567) an ounce, up about US$49. National turnover was 2.13 billion shares worth about $4.53 billion, with 546 stocks up, 471 down and 379 unchanged.