The stock market in Australia managed to end in positive territory on Tuesday, having pared much of the early gains, as euphoria about U.S administration's plan to help banks sell toxic assets weakened, and investors preferred profit taking at higher levels. Earlier in the day, the markets opened strongly taking cues from the U.S. markets, which recorded the biggest single-day rally since late October 2008.
On Monday, the Dow closed up 497 points or 6.84% at 7,776, the Nasdaq gained 99 points or 6.76% to 1,556, and the S&P 500 advanced 54 points or 7.08% to finish at 823. Much of the optimism was due to the unveiling of the Obama Administration's plans to help banks sell toxic assets through the Public-Private Investment Program and pave way for a revival in credit flow, which is critical for reviving the economy.
Crude oil was modestly down $0.26 at $53.54 a barrel in Asian trading having ended Monday's session higher by $1.73 at $53.80 a barrel on New York Mercantile Exchange after hitting an intra-day low of $51.62 and a high of $54.05.
The benchmark S&P/ASX 200 index, having opened strongly and gained as much as 2.6% in early trading, pared back much of its gains over the course of the session before ending higher by 29.7 points, or 0.84%, to 3,580, and the broader All Ordinaries Index, following a similar trend, closed the session up 34.20 points, or 0.98%, at 3,517.
Mining stocks advanced on higher commodity prices. BHP Billiton, the largest mining company in the world, gained 1.77% and Rio Tinto, the third largest miner in the world, advanced 4.73%. However, Oz Minerals shed 11.02% after the government extended its review into a A$1.8 billion rescue bid by Chinese state-owned Minmetals.
Among energy stocks, Woodside gained 4.50%, Oil Search advanced 5.43% and Santos rose 1.67%.
Financial stocks ended mixed as investors resorted to profit taking at higher levels. ANZ Banking Group added 1.31%, National Australia Bank moved up 0.35% and Westpac Banking gained 0.84%. Investment bank Macquarie Group surged 5.38%. On the other hand, Commonwealth Bank of Australia ended lower by 1.65%.
Retail stocks also ended mixed. David Jones advanced 1.38%, and Coles' owner Wesfarmers gained 0.97%, while Woolworths fell 1.12%.
Gold miners ended weak after gold closed marginally lower for a second straight session on Monday. Lihir Gold lost 3.53% and Newcrest Mining shed 1.96%. However, Sino Gold bucked the trend and edged up 0.18%.
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