Mining sector rallies as good news rolls in
THE sharemarket snapped its three-day losing streak to finish higher yesterday helped by resurgent mining stocks.
THE sharemarket snapped its three-day losing streak to finish higher yesterday helped by resurgent mining stocks.Resource shares soared after commodities prices rose overnight following encouraging German, Chinese and US manufacturing data.Data from the Bureau of Statistics released yesterday showed the commodities boom had widened the trade surplus in December, further underpinning mining stocks."We're getting some punch after the pinch," Stuart Smith, a senior adviser at Bell Potter Brisbane, said."The trade surplus is higher than expected, which will be a boon for our resources companies."At the close, the benchmark S&P/ASX200 index was up 42.1 points, or 1 per cent, at 4267.8, and the broader All Ordinaries had risen 42.2 points, or 0.98 per cent, to 4333.2.Ben Taylor, a trader at CMC Markets, said the positive overseas manufacturing data gave markets reason to take a better view of future earnings, given that the local reporting season was about to get under way.Resource stocks also took heart from reports Glencore International was nearing an agreement to merge with Xstrata, adding mines from Africa to Asia to the world's largest listed commodity trader in a deal worth an estimated $US82 billion ($76.9 billion).Among mining stocks, BHP Billiton rose 71? to $37.62 and Rio Tinto added $1.98 to $70.72. Fortescue Metals was up 3? at $5.01 and Newcrest gained 42? at $33.92.The day's top performer was Lynas Corporation, which surged 26?, or 19 per cent, to $1.58 after it was granted a temporary operating licence for its Malaysian rare earths plant despite some local opposition.Qantas added 4? at $1.60 after the airline announced it would raise fares on domestic and international routes in response to increased fuel costs and carbon pricing schemes in Australia and Europe.Wesfarmers gained 19? to $29.90 after its supermarket chain Coles reported its best yet Christmas sales, contributing to a 7.3 per cent rise in first-half sales to $17.5 billion.The director of equities at RBS Morgans in Brisbane, Bill Chatterton, said the muted reaction to Coles's sales data was owing to the relative strength of the Wesfarmers stock compared with Woolworths, as much of the good news appeared to have already been priced in.Woolworths shed 10? to finish at $24.60.Among the banks, Westpac added 7? to $20.92 after the Finance Sector Union confirmed that 560 jobs were to go at the bank in the latest round of job cuts to hit the financial services sector.