Stocks soar as sentiment switches ::

Author: Ross Kelly
Date: 22/07/2008
Publication: The Age

THE sharemarket posted its biggest single-day rise in almost four months, zooming 3.5%, as bargain hunters snapped up banks, property trusts and miners.

The benchmark S&P/ASX 200 Index pushed back through the psychological 5000-point barrier, jumping 171.4 points to 5011.8.

"Everyone's a lot happier today," said ABN Amro Morgans' Brisbane director of equities, Bill Chatterton. "The US had a run of three days of pretty good performances and the banks are just galloping."

Investors were making up for a disappointing day on Friday when local stocks fell more than 1% despite a strong US lead, Mr Chatterton said.

"Emotion can drive the market down and it gets too cheap," he said. "Then people realise we're Australia and not the US and our economy's in pretty good damn shape."

Wall Street capped off a good week on Friday with a 0.4% gain on the Dow Jones Industrial Average after banking giant Citigroup booked a smaller quarterly loss than expected.

Takeover target St George led the banks higher, putting on $1.29, or 4.9%, to $27.55 as its suitor Westpac surged 86¢ to $21.06. Commonwealth Bank gained $1.55 to $43.35, NAB $1.31 to $28.32 and ANZ 59¢ to $18.80.

Macquarie Group rose $2.18 to $48.10 ahead of its annual meeting tomorrow.

Stockland led the property trusts higher with a 39¢, or 8.6%, gain to $4.95. GPT firmed 12.5¢ to $1.685 and Lend Lease advanced 65¢ to $9.40.

BHP Billiton added $1.55, or 4.2%, to $38.20 and Rio Tinto gained $2.99 to $118.49. Resource stocks were hammered last week on global growth concerns.

Fortescue Metals soared $1.01, or 12.4%, to $9.13 after it trumpeted that it had reached the "project completion" stage at its Cloudbreak mine in Western Australia's Pilbara region.

Energy stocks rose, led by Woodside Petroleum, with a 90¢ gain to $56.40 after falling last week on a steep decline in the oil price.

The price of oil last week recorded its biggest weekly drop yet, easing inflation concerns around the globe. On Friday it settled at $US128.88 — well below its trading record of more than $US147 a week earlier.

The spot price of gold closed in Sydney at $US960.20 an ounce, down $US1.50. Newcrest lost 80¢ to $31.41 and Lihir was steady at $3.02.

Among the retailers, Woolworths rallied $1.12 to $26.36, Wesfarmers $1.47 to $33.50, David Jones 17¢ to $3.36 and Harvey Norman 12¢ to $3.22.

Qantas rose 11¢ to $3.41 and Telstra made 12¢ to $4.36.

News Corp added 20¢ to $15.06 and its non-voting scrip added 20¢ to $14.86.

Housewares company Headline Group rose 1.5¢, or 11.1%, to 15¢ after a boardroom spill saw fund manager Roger Montgomery elected to the board. Mr Montgomery's Clime Capital is a major shareholder in the group.

The top traded stock by volume was iron ore explorer Sundance Resources, with 88.29 million shares changing hands together worth $23.87 million. The shares, which had slid from 51.5¢ early last month to 22¢ last Tuesday, leapt 9.5¢, or 43%, to 31.5¢ on news that Sundance had increased the mineral resource at its 90%-owned Mbalam project in Cameroon, West Africa. The company said it had defined a maiden 1.2 billion tonne itabirite hematite resource in the "inferred" category at the Mbarga deposit within the project. AAP

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