Australian shares close at new record highs on Fed decision, metal prices-UPDATE

Australian shares close at new record highs on Fed decision, metal prices-UPDATE

	Published : Thu, 01 Feb 2007 07:04 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Share prices closed at new record highs as investor sentiment was boosted by the overnight decision of the FOMC to leave interest rates unchanged at 5.25 pct, and its statement which painted a brighter outlook for US economic growth and inflation, dealers said.

They added that the overnight rise of base metal prices supported the resources sector while leading banks also gained.

The S&P/ASX 200 advanced 40.7 points or 0.70 pct to a record close of of 5,814.1, just beating Tuesday's record close of 5,812.5. The key index closed off the day's high of 5,816.2 and above the day's low of 5,781.3.

The broader All Ordinaries index rose 39.1 points to a new record close of 5,796.8, surpassing Tuesday's record of 5,791.5.

Dealers said diversified global miner Rio Tinto climbed ahead of an expected record annual profit of around 7.4 bln usd for 2006 due to be announced at 0600 GMT.

News of a planned 860 mln usd expansion of the Cape Lambert iron ore export port in Western Australia's Pilbara region, also underpinned the stock's gains.

Rio Tinto shares rose 1.69 aud or 2.21 pct to finish at 78.29 aud while BHP Billiton gained 0.21 to 26.25.

However, Rio Tinto majority-owned uranium miner Energy Resources of Australia fell after reporting a 19.7 pct drop in 2006 production from its Ranger mine. ERA shares shed 0.60 to close at 20.90.

Alumina rose after reporting a 62 pct rise in 2006 net profit to 511 mln aud. Alumina shares jumped 0.36 to 5.57 pct to end at 60.82.

Construction group Leighton Holdings, advanced on its plans to acquire 40 pct of property developer Devine for 94.7 mln aud.

Leighton shares ended up 0.38 at 22.38 and Devive surged 0.16 or 15.24 pct to 1.21.

A total of 1.77 bln shares traded, worth 5.78 bln aud, with rises outnumbering falls 612 to 574 while 349 stocks were unchanged.

The S&P/ASX200 March futures contract was up 28.0 points at 5,770.0.

The 10-year bond yield fell 0.030 to 5.910 pct while 90-day bills shed 0.010 at 6.383 pct.

CMC Markets' chief equities analyst David Land said the market took its leads from the Federal Reserve decision, better US economic data and the higher metal prices.

'That got us off to a good start but the real upward movement came in the afternoon session and that's been largely due to the sizeable gains in a number of the leading banks,' he said.

He said there remains a strong bullish tone despite some of less than favorable offshore leads of late.

'You would expect some cooling off in the not too distant future but overall sentiment seems to be fairly consistent and positive,' Land said.

National Australia Bank shares rose 0.36 to close at 40.78, Commonwealth Bank advanced 0.28 to 50.32, ANZ climbed 0.39 to 29.50 and Westpac was up 0.33 at 25.40.

Macquarie Bank climbed 0.82 to a record close of 82.87.

QBE gained 0.10 to 30.90, Promina added 0.08 to 7.33, Suncorp-Metway rose 0.30 to 21.90 but AMP eased 0.02 to 10.45 and IAG fell 0.10 to 6.37.

News Corp added 0.05 to 31.50 but its non-voting stock shed 0.15 to 29.85.

Telstra fell 0.05 to 4.19, its T3 receipts lost 0.10 to 2.76 while SingTel added 0.02 to 2.98.

Zinifex jumped 0.72 to 17.12 and Iluka rose 0.27 to 6.51.

Newcrest advanced 0.25 to 21.15, LIhir Gold gained 0.09 to 3.18 and Oxiana added 0.03 to 2.83.

Woodside was unchanged at 37.35, Santos fell 0.12 to 9.18 but Oil Search jumped 0.08 or 2.27 pct to 3.60 after abandoning plans for a Papua New Guinea-Australia gas project.

AGL gained 0.09 to 17.40 and Origin Energy added 0.03 to 9.10.

BlueScope was up 0.07 at 8.69 but OneSteel slipped 0.03 to 4.70.

Brambles retreated 0.20 to 13.68 while Amcor rose 0.08 to 7.38.

Rinker gained 0.10 to 18.70 but James Hardie eased 0.02 to 9.48.

Woolworths climbed 0.39 to a record close of 24.24 while Coles shed 0.09 to 14.14.

PBL was up 0.31 at 19.93 but APN slipped 0.01 to 6.05 and Seven Network also eased 0.01 to 11.74.

Multiplex rose 0.12 to 4.57 while Lend Lease was flat at 18.95.

Qantas shed 0.02 to 5.37 but Virgin Blue rose 0.04 to 2.58 and Toll was steady at 20.95.

(1 usd = 1.29 aud)

paul.daniel@xfn.com