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Stocks up on hopes of end to euro crisis

THE sharemarket closed higher yesterday, on investor confidence that the euro zone would soon resolve its debt crisis.

THE sharemarket closed higher yesterday, on investor confidence that the euro zone would soon resolve its debt crisis.

The S&P/ASX 200 Index gained 40.2 points, or

0.96 per cent, to 4244.5.

The market shot up almost 1 per cent at the open after a strong lead from Wall Street, better than expected US company results, and news that Slovakia would today become the final euro-zone country to vote in favour of an expanded European rescue fund.

Ord Minnett equities consultant Ian Merrick said the Slovakian vote made investors more confident that the euro zone would approve the French and German plan for resolving the European debt crisis.

Shares in Rio Tinto closed $1.88, or 2.8 per cent, higher at $69.34 after the company set a quarterly record for iron ore sales.

BHP Billiton put on 56?, or 1.5 per cent, to $37.64.

"People are just looking for confidence-building [news] and with Rio and what's possibly happening in Europe now, that gives people a bit more confidence to go into [the market]," Mr Merrick said.

Funds continued to flow from defensive sectors such as consumer staples which fell 0.16 per cent to growth areas, including energy stocks, which rose 1.07 per cent.

Linc Energy rose 3?, or

1.5 per cent, to $2.10 after it said it had finalised a

$US236 million purchase of oilfields in the south of the US from ERG Resources.

The weakest stock of the top 100 was Caltex, which fell 37?, or 2.8 per cent, to $12.81.

Qantas firmed 1? to $1.57 despite the airline announcing it was grounding five planes and cutting up to 100 domestic flights due to industrial action.

AMP rose 9?, or 2.2 per cent, to $4.20 after it announced it had appointed former Qantas chief financial officer Colin Storrie as its new CFO.

The best performer in the top 100 was mineral sands producer Iluka Resources, which climbed $1.49, or

9.6 per cent, to $16.99. The miner reported that it had lifted September-quarter production by almost 10 per cent and that the fundamentals of supply and demand remained solid.

Virgin Blue rose 1?, or

3.2 per cent, to 33? after the Australian Competition and Consumer Commission said it had approved the airline's partnership with Singapore Airlines.

The spot gold price edged up $US4.40 to $US1671.30 an ounce by the close of the Australian session.

Market turnover was

1.96 billion shares worth $5.68 billion, with about seven stocks rising for every two that fell on the S&P/ASX 100.

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