Market closes only slightly higher
Market closes only slightly higher

The Australian sharemarket has closed slightly higher after easing back from an earlier peak, with investors encouraged by a positive lead from United States markets and prospects of another cut to interest rates.

At 1.15pm, the benchmark S&P/ASX200 index had gained 8.1 points, or 0.18 per cent, to 4491.5 points, while the broader All Ordinaries index rose 8.4 points, or 0.19 per cent, at 4513.9 points.

On the ASX 24, the December share price index futures contract was six points higher at 4487 points, with 28,511 contracts traded, according to preliminary calculations.

OptionsXpress market analyst Ben Le Brun said Australian investors appeared cautiously optimistic.

"We’re not seeing an aggressive amount of short-selling and not a lot of profit-taking either,” he said.

"The market definitely has impetus to move higher going closer to Christmas, but investors just need a few more questions in the macro (macro-economic) picture answered at this stage."

Financial stocks led the market forward as investors chased dividend yields in that sector, but resources dragged the chain despite pretty good production reports from miners Rio Tinto and Fortescue Metals.

Mr Le Brun said the market had been encouraged by the minutes of the Reserve Bank of Australia’s last board meeting which were released on Tuesday.

"That didn’t do the chances of future rate cuts any harm, and I think that has been a supporting factor in our markets,” he said.

The local market also received a positive lead from United States markets which were boosted by a recovery in US retail sales and better-than-expected quarterly earnings from Citigroup.

Mr Le Brun said investors were still focused on Spain’s debt problems and would be looking to the upcoming release of economic data from China for guidance.

Among the major banks, National Australia Bank lifted 28 cents to $26.62, ANZ improved two cents to $25.79, Commonwealth Bank stepped forward 16 cents to $57.09, and Westpac picked up three cents at $25.72.

In the resources sector, global miner BHP Billiton dropped 28 cents to $33.07.

Rio Tinto backpedalled 70 cents to $55.12 despite increasing iron ore production by five per cent in the September quarter to 67 million tonnes.

Fortescue Metals Group lifted 13 cents to $3.85. The company expects the iron ore price to stabilise at around $US120 per tonne as stimulus in China generates increased demand for steel.

Gold miner Perseus Mining scraped off one cent to $2.76, saying it continued to prosper in the notoriously risky West African sector.

Among other stocks, telco Telstra was steady at $3.94 as it said it expects its dividend payments to remain flat in the current financial year despite forecasting earnings and income growth.

Hearing implant firm Cochlear was $1.05 higher at $71.92 as it faces the prospect of a boardroom spill in 2013 after shareholders voiced their disapproval of the bionic ear company’s remuneration report.

Developer Lend Lease advanced 34 cents to $8.53 as it said discrepancies in its construction company Abigroup’s accounts were a one-off and would not affect its financial results.

Preliminary national turnover was 1.64 billion securities worth $3.25 billion, with 498 stocks up, 469 down and 344 unchanged.

The West Australian

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