Local bourse can't catch global wave

THE sharemarket closed stronger yesterday, boosted by the resources sector, but the leading index again failed to jump an important hurdle.

THE sharemarket closed stronger yesterday, boosted by the resources sector, but the leading index again failed to jump an important hurdle.

The benchmark S&P/ASX200 index gained 14.6 points, or 0.3 per cent, to a three-week closing high of 4290.8 the broader All Ordinaries index was up by 16.5 points, or 0.4 per cent, at 4381.2.

Sentiment rose early in the session after comments by the managing director of the International Monetary Fund, Christine Lagarde, on Sunday that the global economy had pulled back from the brink, and that signs of stabilisation were emerging in the eurozone and the US.

After a strong start, the local market eased back from its intraday highs to less than the significant technical level of 4300 points on the S&P/ASX200 index.

"That 4300 level is a key ceiling and if the market can close above it, that would attract a few investors into the market," a private client adviser at RBS Morgans, Craig Walker, said.

A production fault on a railway at a mine owned by the Brazilian resources company Vale stimulated local iron ore stocks, Mr Walker said. "There was an issue that may affect the short-term supply of iron ore. That followed weakness on Friday due to potential cyclone activity in the west, and Fortescue and Atlas have made considerable gains."

BHP Billiton, the world's biggest mining company, gained 38?, or 1.1 per cent, to $35.35 Rio Tinto advanced 73?, or 1.1 per cent, to $65.85, while Fortescue gained 17?, or 2.9 per cent, to $5.98.

Atlas Iron soared by 11?, or 3.75 per cent, to $3.04, after the company said its mines that were affected by Cyclone Lau, which struck Western Australia at the weekend, were back in operation.

The oil majors were mixed, with Oil Search climbing 2? to $6.96 and Santos firming by 7? to $14.53, but Woodside Petroleum lost 23? to $34.97.

Among the financials, the insurers were strong, with QBE gaining 45?, or 3.4 per cent, to $13.59 before a planned capital raising, Mr Walker said.

Insurance Australia Group added 6?, or 1.8 per cent, to $3.41 and AMP advanced by 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 by 3? at $3.23. Woolworths fell by 64? to $25.03 and PaperlinX fell by 4.35 per cent, to 11?.

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

Market watchers expect the retailer to post a fall in profit of between 15 per cent and 20 per cent when it reports its latest earnings results tomorrow.

The sharemarket darling Campbell Brothers is expanding its food testing operations with acquisitions in Britain and Ireland worth $39 million.

Campbell's shares gained $1.23 to close at $63.01.

Preliminary national turnover was 2.1 billion shares worth $4.5 billion, with 560 stocks up, 488 down and 388 unchanged.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles