RTTNews - The Australian market continued its northward march and ended in positive territory for the seventh consecutive session Wednesday, led by mining stocks on increasing optimism about an increase in demand. A positive closing on Wall Street and slowdown in annual rate of increase in consumer prices, in line with estimates, for the second quarter also lifted market sentiment.
Despite showing choppiness for the better part of the session, the major U.S. averages ended Tuesday's session higher, propelled by the optimism generated by positive earnings news. Better-than-expected results from Caterpillar (CAT), Coca-Cola (KO), Dupont (DD), Merck (MRK) and United Technologies (UTX) and increasing hopes about recovery prospects overshadowed the cautionary remarks of Bernanke who reiterated that the the economy is still in a fragile state, with unemployment high and consumer spending shaky. Bernanke, however, acknowledged that the U.S. economy is showing signs of stabilization and that the stimulus package that authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system.
The Dow advanced 67.79 points or 0.8% to 8,916, the Nasdaq climbed 6.91 points or 0.4% to 1,916 and the S&P 500 rose 3.45 points or 0.4% to 955.
The All Ordinaries Index opened unchanged from its previous close at 4,048. After showing some volatility in early trading, the market continued its northward march, led by gains in mining and energy stocks. The index remained above the unchanged line throughout the rest of the session, trading in a narrow range of 27 points, and closed slightly below the day's high at 4,069, representing a gain of 20.60 points or 0.51%. The benchmark S&P/ASX 200 Index followed a similar trend and ended with a gain of 0.44% or 17.8 points, at 4,069.
On the economic front, the Australian Bureau of Statistics revealed that consumer prices rose at a slower year-over-year pace in the three months ended June. However, the Bureau stated that on a quarterly basis, consumer prices climbed at a faster pace. The consumer price index climbed 1.5% year-on-year in the second quarter, slower than the 2.5% rise in the first quarter, although the increase was in line with economists' estimates.
Light sweet crude oil for September delivery ended the Asian trading session at $65.28, down $0.33 from its previous close in New York at $65.61 on Tuesday.
Metals and energy stocks continued to advance on higher commodity prices. BHP Billiton gained 1.96%. Earlier the company reported yet another solid production performance for the year 2008/09 despite a contraction in demand and weak economic conditions. Among other stocks, Rio Tinto gained 1.62%, Fortescue Metals rose 2.14%, Iluka Resources added 2.37% and Oz Minerals surged up 6.40%.
Energy stocks gained on higher crude oil prices. Woodside Petroleum advanced 1.18% and Santos rose 1.44%. However, Oil Search bucked the trend and slipped 1.43% on profit taking.
Gold stocks ended weaker on profit taking. Lihir Gold shed 1.72%, Newcrest Mining lost 1.84% and Sino Gold fell 2.86%.
Mixed performance was witnessed among the retail stocks. David Jones gained 4.07% and Wesfarmers climbed 1.99%, but Harvey Norman slipped 2.45% and Woolworths edged down 0.43%.
Trading in National Australia Bank was halted following the news that the bank is planning to raise as much as A$2.75 billion through the sale of shares in an effort to weather its rising bad loans and also for funding potential acquisitions.
Among other banks, ANZ Bank managed to add 0.78%, while Commonwealth Bank Australia and Westpac Banking Corp declined 1.64% and 2.41%, respectively
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