News Service from House Harris

Banks, unemployment data push market higher

MELBOURNE, Aug 6 AAP - The Australian sharemarket closed stronger, pulled up by the resource and financial sectors after better than expected unemployment data and a re- rating of banking stocks.

The benchmark S&P/ASX 200 index was up 61.8 points, or 1.45 per cent, at 4326.3, while the broader All Ordinaries index gained 58.8 points, or 1.38 per cent, to 4331.

On the Sydney Futures Exchange, the September share price index futures contract was 74 points higher at 4291 on a volume of 28,136 contracts.

Ord Minnett private client adviser Jon Hancock said the banks led the market higher as analysts re-rated the sector and the unemployment rate for July beat expectations.

"The commentary suggests there are more bad debts out there but the market is playing catch-up with the banks, which have been hard hit over the last 12 months," Mr Hancock said.

Westpac surged 86 cents, or 3.9 per cent, to $22.93 and Commonwealth Bank jumped $1.12, or 2.59 per cent, to $44.35.

National Australia Bank added 32 cents, or 1.26 per cent, to $25.75 and ANZ Bank advanced 24 cents, or 1.25 per cent, to $19.47.

Mr Hancock said Suncorp jumped on speculation that ANZ could be a predator.

"I think there will be ACCC (Australian Competition and Consumer Commission) concerns," Mr Hancock said.

"But the market is re-rating Suncorp up and valuing their banking business at more than zero."

Suncorp rose 36 cents, or 4.71 per cent, to $8.00 even though ANZ chief executive Mike Smith said an acquisition of Suncorp was not on the bank's radar.

News Ltd media reported on Thursday that New York private equity firm JC Flowers is considering an acquisition of Suncorp.

Mr Hancock said the equity market was somewhat supported by the release of Australia's unemployment rate for July, which was steady at 5.8 per cent and beat economists' forecasts of six per cent.

Resources giant BHP Billiton advanced 64 cents, or 1.68 per cent, to $38.79 while Rio Tinto added $1.13, or 1.86 per cent, to $61.90.

Alumina Ltd's shares surged 16 cents, or 9.79 per cent, to $1.795 after the company posted an 86.3 per cent fall in first half profit but said the worst of the downturn may be over.

"The market has been fairly bullish on the market hitting its bottom and there is only upside left for Alumina," Mr Hancock said.

Dual-listed gold miner Newmont Mining Corporation firmed one cent to $4.99, Lihir finished six cents lower at $2.73 and Newcrest fell 32 cents to $30.28.

The spot price of gold in Sydney closed at $US963.15 per fine ounce, 27 US cents down on Wednesday's closing price of $US963.42.

Grocer giant Woolworths eased 12 cents to $26.71 and Wesfarmers, owners of rival grocer Coles, fell 13 cents to $24.83.

The media sector made significant gains after giant News Corp posted a $US3.4 billion ($A4.03 billion) full year loss on writedowns and plunging advertising revenue, but said the worst of the economic downturn may have ended.

News shares finished 44 cents, or 3.05 per cent, higher at $14.86 while its non-voting scrip gained 41 cents, or 3.29 per cent, to $12.86.

Fairfax Media firmed six cents to $1.48.

GPT was the top traded stock by volume, with 270.79 million securities changing hands for $140.27 million.

GPT's security price was 3.5 cents, or 6.93 per cent, higher at 54 cents.

National turnover reached 2.16 billion shares worth $5.21 billion, with 540 stocks up, 475 down and 341 steady.