Rally in Resource Sector Lifts Australian Indexes

Marcus Jacob
12 Dec, 2011
New York City

Australian stocks gained following a rally in resource and banking sectors. The benchmark index added more than 1% after European leaders pledged to meet tighter fiscal and financial guidelines.

[R]8:00 PM Sydney – Australian stocks gained following a rally in resource and banking sectors. The benchmark index added more than 1% after European leaders pledged to meet tighter fiscal and financial guidelines.[/R]

Australian stocks closed higher on the optimism that the European nations will follow through the pledge to a fiscal and financial discipline to meet budget deficit and debt targets.

The euro zone has been under the pressure from investors after to announce measures to contain the widening debt contagion in the region. The latest agreement of an intergovernmental pact will limit the annual structural deficit to 0.5% for each nation and agree on revised and tougher guidelines on total debt.

The ASX 200 index rose 49.8 or 1.2% to 4,252.8 and All Ordinaries index increased 1.1% or 47.3 to 4,311.40. The Australian dollar edged lower to US$1.017.

In trading, stock turnover decreased to 1.72 billion shares worth $3.7 billion and for every share that fell six shares closed higher.

Stock Movers

BHP Billiton Ltd fell $0.67 to $36.53 and Rio Tinto Ltd increased $0.39 to $64.13. Newcrest Mining declined $0.42 to $32.63.

Fortescue Metals Group increased 4 cents to $4.76, Lynas Corporation Limited closed up $1.36 and Iluka Resources declined $0.23 to $16.62.

Oil Search Limited traded up 10 cents to $6.46, Santos Limited rose 41 cents to $13.22 and Woodside Petroleum increased $0.48 cents to $32.37.

Silver Lake Resources declined 6.8% to $3.50 after the company said the results of its latest drilling project did not meet its expectations.

Commonwealth Bank of Australia rose $0.99 to $49.83 and National Australia Bank increased 34 cents to $24.36. ANZ edged rose 10 cents to $20.95. Westpac added 22 cents to $21.29.

David Jones Limited fell 2 cents to $2.65 and Wesfarmers Limited fell 58 cents to $30.90 Harvey Norman Holdings closed unchanged at $2.09.

IAG increased 4 cents to $3.13 a day as the company remains the subject of takeover rumors.

Woolworths Limited closed up 34 cents to $25.95 and James Hardie Industries SE increased 11 cents to $6.89.

Qantas Airways Ltd closed unchanged at $1.59, Virgin Australia closed unchanged at 35.5 cents and Flight Centre gained 94 cents to $19.35.

QBE Insurance Group Limited increased 18 cents to $14.06.