THE sharemarket finished higher yesterday despite late-session weakness by resource heavyweights and the dark shadow of Europe's debt crisis overhanging the market.
At the close, the S&P/ASX 200 Index was up 26.8 points, or 0.64 per cent, at 4213.7 19 points below its best for the day..
Ord Minnett private client adviser Jon Hancock said the resource sector had lost steam during the session, with shares in Rio Tinto giving up ground after it approved a $US1.33 billion of funding for its Simandou iron ore project in Guinea.
Rio Tinto finished down $1.17, or 1.8 per cent, at $65.08 after early sales at $66.40.
BHP Billiton closed flat at $36.40 after gaining 0.6 per cent earlier in the session, and Fortescue Metals Group lost 12?, or 2.6 per cent, to $4.52.
Lynas Corporation was another major mover, falling 12?, or 9.9 per cent, to $1.09 on turnover of 72.2 million shares on media reports that it has not been granted a licence to import rare earth ores into Malaysia.
"[There were] huge volumes going through there," Mr Hancock said. "Volumes are relatively
light but you've got spots of pretty strong volumes."
Europe's debt crisis continued to be a cloud hanging over the market, he said. "There is no way that a meeting next week is going to ensure the problem is going to go away."
Banks and financial stocks were higher, with the big four lenders led by National Australia Bank, which gained 37?, or 1.5 per cent, to $24.60.
Telstra rallied 5?, or
1.6 per cent, to $3.18 on turnover of 47.4 million shares after Tuesday's shareholder vote to approve the telco's deal with the federal government on the national broadband network.
US stocks rallied strongly overnight near the close on a report in Britain's The Guardian that France and Germany were ready to sharply boost the euro zone's rescue fund to help counter the sovereign debt crisis.
However, Dow Jones Newswires later reported that an official familiar with the negotiations had said reports of an agreement by Germany and France to raise the European Financial Stability Facility to ?2 trillion ($A2.7 billion) were "totally wrong".
Patersons Securities associate director John Curtin said the Australian market would be in a lull until the Reserve Bank's interest rate decision on November 1.
The spot price of gold in Sydney finished the Australian session down $US8.05 at $US1659.87 an ounce.
Frequently Asked Questions about this Article…
How did the ASX 200 perform yesterday and what were the main market moves?
The S&P/ASX 200 finished higher, up 26.8 points (0.64%) at 4,213.7, despite late weakness from resource heavyweights. The market closed about 19 points below its intraday high as resources slipped while banks and financials pushed the market into the green.
Why did resource stocks weigh on the market despite the overall gain?
Resource stocks lost steam during the session: Rio Tinto slid after approving funding for the Simandou project, Fortescue Metals fell, and Lynas plunged on media reports about import licensing. Heavy selling in parts of the sector pared earlier gains and created late-session weakness for the market.
What drove the drop in Rio Tinto shares and how much did they fall?
Rio Tinto approved US$1.33 billion of funding for its Simandou iron ore project in Guinea, which was followed by some profit-taking. Rio Tinto finished down $1.17 (about 1.8%) at $65.08 after earlier sales at $66.40.
Why did Lynas Corporation shares fall sharply and what was the trading volume?
Lynas fell after media reports said it had not been granted a licence to import rare-earth ores into Malaysia. The stock dropped around 9.9% to $1.09 on heavy turnover of 72.2 million shares.
How did the big banks perform and which lender led the gains?
Banks and financial stocks were higher overall, led by the big four lenders. National Australia Bank was a standout, rising about 1.5% to $24.60, helping support the broader market.
What caused Telstra to rally and how did it trade?
Telstra rallied after shareholders voted to approve the telco's deal with the federal government on the national broadband network. The stock gained roughly 1.6% to $3.18 on turnover of 47.4 million shares.
Did international developments, like Europe's debt crisis, affect the Australian market?
Yes. Europe's sovereign debt crisis remained a cloud over markets. Early reports that France and Germany would boost the euro-zone rescue fund briefly lifted US stocks, but a later source said reports of a €2 trillion increase were incorrect. That uncertainty contributed to cautious trading in Australia.
What happened to the gold price in Sydney during the session?
The spot price of gold in Sydney finished the Australian session down US$8.05 at US$1,659.87 an ounce.
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