Resource stocks drag as index climbs

THE sharemarket closed stronger yesterday as investors snapped up industrial stocks amid renewed hopes for a solution to the European debt crisis.

THE sharemarket closed stronger yesterday as investors snapped up industrial stocks amid renewed hopes for a solution to the European debt crisis.

The S&P/ASX 200 Index gained 23.8 points, or 0.58 per cent, to 4147.7.

Burrell Stockbroking senior adviser Jamie Elgar said market gains were across the board, except for the resource sector. "There was a combination of things, with data coming out of China and markets still really looking for some easing, particularly from the US Federal Reserve."

Mr Elgar said markets remained hopeful of a potential bailout for Spain.

"Spain's 10-year bond yield is now in the unsustainable category," he said. "There's a lot of different talk coming out of Europe that maybe Spain needs to have a full bailout, or they're better off doing a euro exit."

The big four banks all closed higher. Commonwealth was in the lead, gaining 55? to $55.41, and Westpac put on 16? to $22.61. ANZ firmed 2? to $22.66 and National Australia Bank was also up 2?, at $23.84.

Goldminers shone in what was otherwise an off day for the resource sector. Newcrest Mining rose 22? to $22.37 after it reported it had exceeded its 2011-12 copper production targets and met its gold production forecast.

At the close of Sydney trade, spot gold was up $US21.42 at $US1606.06 an ounce.

OZ Minerals lost 5? to $7.38 after revealing a sharp quarterly jump in production costs while Energy Resources of Australia lost half a cent to $1.47 after narrowing its first-half net loss.

BHP Billiton closed 12? higher at $30.97 but Rio Tinto fell 50? to $50.51.

Qantas made its biggest gain in weeks, soaring 9.5?, or 9.6 per cent, to $1.08 after the company confirmed it was in talks with several airlines, including Dubai-based Emirates, about potential alliances.

Shares in Wesfarmers rose 27? to $32.25 after it reported a rise in sales at its Coles supermarket division but a 1.8 per cent fall in turnover at retail chain Target and no change at Kmart.

Investors welcomed Caltex Australia's announcement that it would close its Sydney oil refinery and replace it with an import terminal. The shares rose 20? to $14.26.

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