MAKING NEWS

Sat, 21 January 2012
Share market ends week with a bang
The Australian share market has ended the week at a nearly six-week high after investors appeared optimistic about economic prospects for the United States and Europe.

Markets in the US and Europe had a strong finish overnight; investors welcomed successful bond sales in Europe and solid economic data from the US.

Investors here also were bullish, sending stocks sharply higher at the open.

After wavering in the afternoon the market jumped at the finish line and both the ASX 200 and the All Ordinaries Index closed 0.6 per cent higher at 4,240 and 4,303 respectively.

Resources and energy stocks saw the best results, but the gains were broad-based, with 141 shares on the benchmark index rising.

China's manufacturing activity contracted for a third consecutive month in January as its economy slows, the preliminary HSBC purchasing managers' index (PMI) shows.

The index stood at 48.8 in January, up marginally from 48.7 in December. A reading below 50 suggests contraction in the sector.

HSBC's index differs from official manufacturing figures, which showed that the sector unexpectedly rebounded in December on holiday shopping, with a reading of 50.3.

Rare earth miner Lynas saw the largest gain on the ASX 200; it soared 11.3 per cent to $1.28 after Malaysia said it would announce a decision on a license for the company to refine rare earths there.

And energy producer Nexus energy jumped 8.3 per cent to 26 cents after announcing a joint venture with Royal Dutch Shell in Western Australia.

Miners were boosted by a four-month high for metals prices in London overnight; BHP Billiton rose 0.4 per cent to $37.48, Rio Tinto gained 1.2 per cent to close at $67.53 and Fortescue Metals rose 2.6 per cent to $5.19.

Oil and gas producers Woodside Petroleum and Santos posted solid results after issuing quarterly production reports yesterday.

Both reported rising sales revenue despite falls in production.

Woodside gained 1.5 per cent to $33.99 and Santos jumped 1.4 per cent to finish at $13.43.

Major financial stocks were weak, with solid bank profit results in the US failing to significantly boost the sector here.

Westpac saw the largest gain, rising 0.4 per cent to close at $20.68. It has announced plans to join the other big banks in selling covered bonds.

And shares in Telstra closed 0.9 per cent higher at $3.33.

The Australian dollar was steady against its US counterpart and at 4:30pm (AEDT) it was buying 104.1 US cents, 80.3 Japanese yen, 80.3 euro cents, 67.2 British pence and $NZ1.30.

Tapis crude oil closed at $US120.72 a barrel in Singapore overnight and West Texas Crude oil was higher, worth $US100.68 a barrel.

Spot gold was worth $US1,657.73 an ounce.

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