Stocks up despite weaker BHP and banks

THE sharemarket closed higher yesterday as gains on energy stocks offset weakness among the big banks and BHP Billiton.

THE sharemarket closed higher yesterday as gains on energy stocks offset weakness among the big banks and BHP Billiton.

The S&P/ASX 200 Index rose 16.5 points, or 0.4 per cent, to 4290.7.

After opening about firmer following small gains overnight on Wall Street, the market gradually gave slid back to neutral before rallying into the close.

Austock Securities senior client adviser and strategist Michael Heffernan said the market maintained its positive momentum despite the Reserve Bank's surprise decision to leave the official cash rate unchanged on Tuesday.

BHP closed down 15?, or 0.4 per cent, at $37.75 after reporting a first-half net profit of $US9.941 billion, down 5.5 per cent from the previous corresponding period and slightly below market consensus.

Mr Heffernan said the BHP report was "on the disappointing side of ordinary" and the stock had reacted accordingly.

"Nevertheless, there were enough positive moves around the place to nullify that," he said.

Information technology was the day's best-performing sector, rising

1.76 per cent.

Energy stocks gained

1.55 per cent, with Energy Resources Australia (up 4.5?, or 3.5 per cent, at $1.35) and Aurora Oil and Gas (up 8?, or 2.7 per cent, at $3) the top two gainers in the sector.

Alumina closed down 1.5? at $1.285 after Alcoa said it was placing its Point Henry aluminium smelter under review, putting 600 jobs at the Geelong plant at risk.

The big retail banks finished mostly lower. Commonwealth slipped 19? to $50.32, NAB backpedalled 28? to $22.93 and Westpac ended 2? lower at $20.90, but ANZ climbed 25? to $21.61.

Macquarie Group, which said on Tuesday it expected full-year net profit to fall

25 per cent, bounced back from its declines the previous day to close up 81?, or 3.1 per cent, at $26.71.

A pick-up in gold helped Kingsgate advance 22? to $7.86 but Newcrest Mining fell 16? to $33.38. The spot gold price was at $US1749.31 an ounce at the close, up $US26.59 from $US1722.72 on Tuesday.

The dollar pushed past the $US1.08 mark as markets continue to react positively to the RBA's rates decision. At the 5pm close, the Aussie was at $US1.0818 up from $US1.0799 on Tuesday.

ANZ foreign exchange strategist Andrew Salter said the currency had been subdued for most of the day.

"There is always that period of reassessment following a surprise like yesterday and certainly you'd have expected the market to do some reassessing today, he said.

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