Wesfarmers drives stock rally
The Australian share market has remained above the 5000-point mark, boosted by encouraging company earnings reports.
The benchmark S&P/ASX200 index rose 33.2 points, or 0.66 per cent, to 5,036.9 points, and the broader All Ordinaries index was up 32.7 points, or 0.65 per cent, at 5,057.2 points.
OptionsXpress market analyst Ben Le Brun said investors had been looking forward to miner Rio Tinto’s company earnings report, which were released after the market close.
‘‘That is where we have seen a lot of the buying interest today,’’ he said.
The miner reported a net loss of $US2.99 billion - the first in its history - dragged down by well-flagged impairments against its aluminium and Mozambique coal assets.
After one-offs, Rio’s underlying earnings exceeded expectations, reporting underlying earnings of $US9.3 billion in 2012, above the consensus of analyst estimates of $US9.1 billion.
Rio Tinto rallied $1.61, or 2.3 per cent, to $72.07, while rival BHP Billiton jumped 97 cents to $38.89.
Mr Le Brun said the financial results of diversified conglomerate Wesfarmers was the latest of several company reports to encourage investors.
The financial results from engineering firm Downer EDI, and a Chinese investor taking a stake in aluminum producer Alumina also reverberated well among investors.
‘‘After we got that Wesfarmers’ number, that’s when the ASX200 really started to make some inroads. So it’s all looking pretty positive at this stage,’’ Mr Le Brun said.
Aluminum producer Alumina was nine cents, or 7.5 per cent, stronger at $1.29, after a large Chinese investor took a $452 million stake in the company.
Diversified conglomerate Wesfarmers improved 46 cents to $38.88, after it reported a nine per cent growth in first half profit, boosted by better earnings from supermarket operator Coles and home hardware supplier Bunnings.
Downer EDI surged 38 cents, or 7.82 per cent, to $5.24, after the engineering firm lifted its profit, resumed paying dividends, and said the $3.6 billion Waratah train project in NSW was now in very good shape.
Among other stocks, retailer David Jones lost one cent to $2.67 as its second quarter sales, which includes the vital Christmas period, fell 1.4 per cent.
Among the major banks, Commonwealth Bank shed 21 cents to $66.90, Westpac added 43 cents at $28.76, ANZ was 25 cents richer at $28.06, and National Australia Bank firmed six cents to $29.35.