Resource stocks lift index on China move
THE sharemarket yesterday hit its highest level since October a nine-month high after China's central bank said it planned to increase the supply of cash to the world's second-biggest economy.
THE sharemarket yesterday hit its highest level since October a nine-month high after China's central bank said it planned to increase the supply of cash to the world's second-biggest economy.Australian resource stocks, which account for roughly a quarter of the market, reacted positivelyto the news, which in turn pulled the rest of the market higher.In the sharemarket's second day of advance ina row, it shrugged off a negative lead from Wall Street where the Dow Jones Industrial Average had dropped 82.79 points,0.63 per cent, to 13,032.75, largely on concerns about Europe.The S&P/ASX 200 Index closed up 14 points, or0.3 per cent, at 4362.7.ATI Asset Management's head of research, David Liu, said Australian investors had enjoyed some strong days from the major miners and energy companies, with the release of positive quarterly production reports from BHP Billiton, Rio Tinto and Woodside Petroleum, as well as positive updates from Fortescue Metals.That was helped by news that China's central bank could soon increase liquidity, an action intended to lift economic activity."Looking at the flow of funds over the past few days, there's definitely been a move into BHP Billiton and Rio and some of the large miners, that's probably the most significant thing," he said."Predominantly the consensus trade has, until recently, been underweight resources and overweight financials. That's coming back a little bit."BHP Billiton shares climbed 40? to $35.50 while Rio Tinto rose 10? at $66.60.Fortescue Metals gained 9? at $6.02, despite third-quarter iron ore production falling below guidance following the cyclones in Western Australia.Shares in oil and gas producer Woodside Petroleum climbed 49? to $35.04 after it maintained its full-year production target and increased its first-quarter revenue.Santos firmed 4? to $14.04 as higher oil and gas production and stronger prices boosted first-quarter sales revenue by 50 per cent.Among the big banks, Commonwealth was flat at $50.78 after it announced plans to increase market share. Westpac dipped 4? to $22.02, ANZ firmed 4? at $23.30 and NAB rose 6? to 25.24.Among other stocks, ports and rail operator Asciano rose 4? to $4.79 as it reached agreement with the Maritime Union of Australia on a new enterprise agreement for container terminal workers across Australia.Telstra rose 3? to $3.39.