'Punch after the pinch' as mining hits back
THE sharemarket snapped its three-day losing streak yesterday to finish strongly on the back of resurgent mining stocks.
THE sharemarket snapped its three-day losing streak yesterday to finish strongly on the back of resurgent mining stocks.Mining stocks soared after commodities prices rose overnight following encouraging German, Chinese and US manufacturing data.Australian Bureau of Statistics data showing that the commodities boom had widened the trade surplus in December further underpinned resources stocks. "We're getting some punch after the pinch," said Bell Potter Brisbane senior adviser Stuart Smith. "The trade surplus is higher than expected, which will be a boon for our resources companies."At the close, the S&P/ASX 200 Index was up 42.1 points, or 1 per cent, at 4267.8.CMC Markets sales trader Ben Taylor said the positive overseas manufacturing data gave markets reason to take a more positive view of future earnings, given the local reporting season was about to get under way.Resources 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. Among mining stocks, BHP Billiton closed up 71? at $37.62, while Rio Tinto added $1.98 to $70.72.Fortescue Metals was up 3? at $5.01 and goldminer Newcrest rose 42?, or 1.3 per cent, to $33.92.The day's top performer was Lynas Corp, which surged 25.5?, or 19.1 per cent, to $1.59 after it was granted a temporary operating licence for its Malaysian rare-earths plant.Qantas firmed 4? to $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?, or 0.6 per cent, to $29.90 after its supermarket chain, Coles, reported its best-yet Christmas sales.RBS Morgans Brisbane director of equities Bill Chatterton said the muted reaction to Coles' sales data was due to the relative strength of Wesfarmers' shares compared with rival Woolworths, as much of the good news seemed to already be priced in.Woolworths, which on Wednesday reported quarterly sales at its key supermarket division were up just 1.1 per cent, closed down 10? at $24.60.Westpac added 2? to $20.87 after the Finance Sector Union confirmed 560 jobs are to go at the bank in the latest round of cuts to hit the financial services sector.Gold closed up $US9.45 at $U1746.45 an ounce.