The Australian sharemarket has closed higher, following gains on US and European markets in the wake of last week’s summit of European Union leaders.
On Wall Street on Friday, stocks jumped two per cent, sparked by the dramatic measures adopted by European leaders meeting in Brussels to stem the eurozone debt crisis and stimulate growth.
On Monday, on the Australian bourse, the benchmark S&P/ASX200 index rose 38.4 points, or 0.94 per cent, to 4,133.0 points, while the broader All Ordinaries index was up 37.0 points, or 0.89 per cent, at 4,172.5 points.
On the ASX 24, the September share price index futures contract was up 40 points at 4,097 points, with 31,352 contracts traded.
“I think it (the rise in the Australian market) is the continuation of the very positive leads that we got Friday night out of the US. That was driven by the outcome of the euro summit,” City Index chief market analyst Peter Esho said.
But Mr Esho said the size of the rise was a little disappointing compared to how markets offshore finished on Friday.
He said the local bourse was being weighed down by sluggish share price action in global miner and market heavyweight BHP Billiton and other resources stocks.
“There’s doubts (among investors) about the numbers that they (BHP Billiton) are about to report (in the upcoming company earnings season),” Mr Esho said.
He said the market did not think that BHP Billiton would be able to withstand a decline in the natural gas price in the US and that the company may have to make writedowns on some acquisitions from last year.
In the resources sector, BHP Billiton was 27 cents higher at $31.72, and Rio Tinto nudged up one cent to $56.51.
Among other stocks, David Jones slumped 26 cents, or 10.04 per cent, to $2.33 as the UK equity firm which made a $1.65 billion takeover proposal for the upmarket retailer withdrew its offer.
Lend Lease rose 31 cents, or 4.31 per cent, to $7.51 after the developer announced a higher than expected operating profit for the financial year.
Gaming machine supplier Aristocrat Leisure retreated 31 cents, or 11.23 per cent, to $2.45 after the company failed to impress investors when it said it expects an improved first half net profit.
Woodchipper Gunns was still in a trading halt as it said it was reviewing the value of its forestry assets in the light of declining prices in the woodchip market. Gunns last traded at 16 cents.
The price of gold in Sydney was $US1,590.94 per fine ounce, up $US20.54 on Friday’s closing price of $US1,570.40.
National turnover was 1.53 billion securities worth $4.09 billion, with 641 stocks up, 306 down and 317 unchanged.
