13/10/2011 - 07:45

Stocks open higher with broad gains

13/10/2011 - 07:45

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Stocks open higher with broad gains

The Australian share market opened slightly higher, with broad-based gains against a positive international backdrop of growth.

At the open (AEDT), the benchmark S&P/ASX200 index gained 40.8 points, or 0.97 per cent, at 4,245.1 and the broader All Ordinaries index rose 40.1 points, or 0.94 per cent, to 4,306.5.
UBS executive director of institutional sales Rob Taubman said the rise came on the heels of a tranche of positive economic news from Europe and the US overnight.

One day after rejecting an expanded European rescue fund to help prevent debt-ridden Greece from defaulting, the main Slovakian parties reached a deal on Wednesday to again vote on, and approve, the fund by Friday.

US stocks posted solid gains Wednesday as investors took heart from such signs of progress in Europe in dealing with the eurozone debt crisis.

The Dow Jones Industrial Average rose 102.55 points (0.90 per cent) to close at 11,518.85, while the S&P 500, a broader measure of the markets, climbed 11.71 points (0.98 per cent) to 1,207.25.

The tech-heavy Nasdaq Composite added 21.70 points (0.84 per cent) to 2,604.73.

Mr Taubman said sentiment also improved on the back of better-than-expected results from US companies such as Burberry and PepsiCo as the US reporting season got underway.

"All sectors of the S&P 500 (rose) so it shows a positive flow back into the US market, with very broad (gains) ... It's a good signal of broad-based buying," he said.

Resources stocks led the market at the open, with the materials sector rising 1.4 per cent after copper surged to a two-week high overnight. It went above $7,500 per tonne, as budding signs of increased Chinese purchases underpinned sentiment and drove prices further away from last week's 14-month low.

"Copper is moving higher, which is a good indicator of commodity demand," he said.

Mining giant BHP Billiton gained 55 cents, or 1.5 per cent, to $37.63, while fellow miner Rio Tinto rose $1.15, or 1.7 per cent, to $68.61.

Fortescue Metals Group also advanced 16 cents, or 3.4 per cent, to $4.88.

Gains were broad-based across most sectors, with typically defensive sectors lagging behind, as money flowed into riskier stocks.

Health care and consumer staples rose 0.15 per cent and 0.51 per cent, respectively.

The weakest stock of the top 100 companies on the ASX was biopharmaceutical company CSL Ltd, which fell 1.1 per cent, or 33 cents, to $29.99.

Meanwhile, making headlines in local trade, Qantas shares advanced 1.5 cents to $1.57 despite the airline announcing it expected at least 7,000 of its passengers to be affected by strikes at airports across the country on Thursday.

Qantas baggage handlers and ground crew are holding rolling strikes throughout the day, forcing the airline to cancel 14 domestic flights and delay another 38.
AMP Ltd rose 2.2 per cent, or nine cents, to $4.20 after the bank said former Qantas chief financial officer (CFO) Colin Storrie had been appointed CFO of wealth manager AMP.

Mr Storrie will replace AMP's current CFO Paul Leaming, who will retire at the end of the year after almost 14 years with AMP.

The best performing stock on the ASX 100 was mineral sands producer Iluka Resources, which gained 6.5 per cent, or $1.00, to $16.50, after it said it had increased September quarter production by almost 10 per cent and that the fundamentals of supply and demand remain solid.

The spot price of gold in Sydney was $US1,678.9 per fine ounce, down $US12 an ounce from Wednesday's close at $US1,666.90.

Market turnover was 196.26 million shares worth $514.61 million, with about 12 stocks rising for every one that fell on the ASX 100.

The December share price index futures contract was up 34 points at 4,248, with 11,723 contracts traded.

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