Rio Tinto propels market higher

Rio Tinto propels market higher

The Australian sharemarket has closed higher propelled by Rio Tinto after its chief Tom Albanese resigned in the wake of the miner’s $US14 billion worth of write-downs.

The benchmark S&P/ASX200 index added 14.6 points, or 0.3 per cent, to 4771.2, while the broader All Ords gained 15 points, or 0.3 per cent, to 4794.7.

Among the sectors, materials gained 0.8 per cent, financials and energy both added 0.3 per cent, while consumer staples slipped 0.6 per cent.

The ASX200 added 1.3 per cent for the week, the biggest gain in seven weeks, and is up 2.6 per cent since the beginning of the year.

The market was little moved by Chinese GDP data, which pointed to a 7.9 per cent growth in the fourth quarter from a year earlier, snapping seventh straight quarters of slowing expansion.


"I think it (the market) probably wants to see a much stronger figure to be convinced," said Winston Sammut, investment director at Maxim Asset Management, of investors confidence in the world's second biggest economy.

Rio Tinto climbed 2.7 per cent, or $1.75, to $66.35 after chief executive Tom Albanese stepped down following billions of dollars of write-offs on aluminium and coal assets, to be replaced by iron ore division chief Sam Walsh.

"He is probably a bit more disciplined and stringent player," said Evan Lucas, a market strategist at IG Markets. "He is quite a good fit."

The other big miners also closed in the black. BHP Billiton gained 16 cents to $36.50 and Fortescue added 14 cents to $4.52.

"Notwithstanding commodities prices have picked up and the iron ore prices have done well, perhaps it has reached the peak for the time being," Mr Sammut said.

OZ Minerals, Australia's No. 3 copper producer, jumped 5.2 per cent after copper rose more than 1 per cent on Thursday on encouraging US housing and jobs data.

Financials were mixed, with National Australia Bank adding 1.2 per cent and Westpac dipping 0.1 per cent.

The Australian dollar slipped against the greenback but climbed to fresh four-year peaks on the yen on Friday as Japanese officials talked down the currency while piling pressure on the Bank of Japan for ever more radical reflationary policy.

Against the yen, the Aussie reached as far as 95.02, territory not visited since 2008, when it topped out at 104.48.

With all the action in the yen, the dollar was sidelined against the US dollar. The Aussie faded away to $US1.0520, from $US1.0545 in New York, but remained within reach of a four-month peak around $US1.0600 set last week.

BusinessDay with agencies

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