Stocks surge, but turbulence looms

Stocks surge, but turbulence looms

The Australian sharemarket closed stronger yesterday after a healthy lead from overseas, but brokers warned the gains could be short-lived.
Fat Prophets director Angus Geddes said the market had rallied, with the big banks experiencing a standout day. "We have had a turbulent couple of weeks and I think we are seeing buyers coming back into the market and obviously people see the banks as a bit of a safe haven," he said.
But Mr Geddes said more turbulent days were to come as stocks returned to fairer prices after a long bull run. "I don't think we have seen the end of the correction," he said.
The ASX200 ended the day up 19.2 points to 4425.3 while the All Ordinaries rose 18.6 points to 4389.9. At the end of day trading on the Sydney Futures Exchange, the December share price index contract climbed 20 points to 4426 on volume of 18,292.
Market darling Macquarie Bank was out of favour, dropping $2.95 or 4.49 per cent to $62.75 in the wake of reports it had launched a takeover bid for British pub operator Spirit Group.

The big four banks all posted healthy gains with ANZ rising 45c to $23.47, Westpac climbing 39c to $20.71, National Australia up 31c to $32.23 and Commonwealth Bank rising 25c to $37.75.
The big miners were also in positive territory with Rio Tinto climbing 74c to $55.95, BHP Billiton up 7c to $20.05 and Alumina lifting 8c to $5.74.
Property and construction group Lend Lease rose 23c to $13.92 after it forecast continued profit growth.
Rupert Murdoch's News Corp rose 15c to $20.82 and its non-voting stock was up 7c to $19.79, while Kerry Packer's PBL rose 32c to $16.56.
Telstra climbed 6c to $4.18 and Optus-owner Singapore Telecommunications was unchanged on $1.93.
Coles Myer went ex-dividend by 17c yesterday and dropped 8c to $9.74 while rival Woolworths fell 6c to $15.40 and David Jones rose 4c to $2.26.
Western Australian ship builder Austal climbed 19c to $2.34 after winning a share in a $US223 million ($296 million) contract to build the first of two vessels for the US Navy.
Wall Street rallied on Friday as a report on consumer prices eased inflation fears. The Dow Jones industrial average closed up 70.75 points at 10,287.34 and the Standard & Poor's 500 Index rose 9.73 points to 1186.57.
The price of gold in Sydney was $US471.80 per fine ounce, up US67.5c from Friday's close.
Among the gold stocks, Newcrest eased 1c to $20.24, Newmont fell 5c to $5.97 and Lihir Gold dipped 2.5c to $1.765.
The top traded stock by volume was IM Medical with 75.53 million shares worth $1.85 million changing hands. The share price rose 0.2c to 2.4c.
Market turnover was 1.05 billion shares worth $2.90 billion, with 529 stocks up, 453 down and 331 unchanged.