Banks, Miners Help Rally

Illawarra Mercury

Friday March 7, 2008

THE Australian share market snapped a three-day losing streak finishing more than 1 per cent higher.

The market was buoyed by stronger commodity prices and resurgence of banking stocks from what may be an end to the cycle of higher interest rates by the Reserve Bank.

At the close, the benchmark S&P/ASX200 index was 58.9 points higher at 5435.5, while the broader All Ordinaries gained 60.3 points to 5531.9.

On the Sydney Futures Exchange, the March share price index contract was 68 points higher at 5444, on a volume of 23,972 contracts.

Austock senior client adviser Michael Heffernan said the banks and miners bolstered the market following an upbeat lead from offshore.

"Positive leads from the US and commodities generally positive means flashing green lights for our markets," he said.

Bellwether stock BHP Billiton rose nearly 2 per cent, or 77? to $39.80 as its takeover target Rio Tinto lifted $2.25 to $136.

"The cycling of increasing interest rates looks to be at the end, which is very positive for the banks overall," Mr Heffernan said.

National Australia Bank shares ended up 36? to $28.46 after increasing its variable home loan rate by 29 basis points. St George Bank ended over 2 per cent higher, or up 46? to $22.01 after it reaffirmed its guidance for earnings per share to grow by 10 per cent this year.

Commonwealth Bank added 62? to $40.57, ANZ lost 12? to $21.19 and Westpac fell 30? to $22.13.

After the market closed, Consolidated Media announced that a major backer of its proposed $3.3 billion privatisation has pulled out due to changed investment conditions. ConsMedia shares were placed in a trading halt earlier and last traded at $4.30.

Qantas was a big mover on the day, climbing 4.36 per cent or 18? to $4.31, after executive general manager John Borghetti said he saw no slowdown in demand.

ABC Learning shares resumed trading after the child-care company sealed a deal to sell 60 per cent of its US business to Morgan Stanley Private Equity. ABC fell 39?, or 18.22 per cent, to $1.75.

Allco Finance Group shares have gone into a trading halt until Monday pending an announcement by the company. Earlier yesterday, Allco said it has been forced by margin calls to sell most of its holdings in three Rubicon property trusts. Allco last traded up 11? to 63?.

© 2008 Illawarra Mercury

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