Resource stocks help market make up lost ground

RESURGENT resource stocks yesterday helped the sharemarket claw back a large proportion of the big losses the previous day.
After the biggest one-day fall in three months on Wednesday, the benchmark ASX 200 bounced back to close up more than 1 per cent, or 54 points, at 4840.9, while the All Ordinaries rose 51.1 points to 4790.9.
CMC Markets senior dealer James Foulsham said many investors believed the sell-off on Wednesday was "overdone", and a less than anticipated fall on Wall Street overnight had also helped sentiment here.
"Most of the big-cap stocks did pretty well. People are long-term bulls on the market and they just saw [Wednesday] as a correction and [yesterday] as a good opportunity to buy back in," he said.
BHP Billiton led the resurgence, rising 72c to a record high of $24.45, while Rio Tinto jumped $2.25 to an all-time high of $72.50.
Woodside Petroleum soared 69c to $42.49 after it announced that it had boosted production and posted a 29 per cent increase in revenue to $2.7 billion.
The bourse's slump on Wednesday was sparked by poor profit results in the US from technology giants Yahoo and Intel, and a 3 per cent fall on Japan's stockmarket prompted by a scandal at an internet firm.
But some semblance of calm descended on investors in Japan yesterday when the benchmark Nikkei index closed more than 2 per cent higher, making for its biggest one-day gain in three months.
On the local bourse, Toll Holdings was among the biggest losers yesterday, falling 55c to $12.15 as investors continued to assess the impact of the Australian Competition and Consumer Commission opposing the company's hostile takeover bid for Patrick Corp.
Toll has fallen almost 15 per cent over the past two days, and Mr Foulsham said the market did not believe the transport company had much chance of successfully appealing against the decision in the Federal Court. Patrick rose 18c to $6.93.
Wheat exporter AWB also continued to suffer from the fallout over the inquiry into its involvement in the United Nations oil-for-food scandal. AWB fell 25c to $5.52 yesterday, having slumped more than 13 per cent over the week.
Macquarie Equities' private client adviser, David Halliday, agreed the bourse's slump on Wednesday had presented good buying opportunities.
"There is a huge amount of cash sitting on the sidelines waiting for a home … and any weakness is seen as a buying opportunity," he said.
Mr Halliday said a slight easing in oil prices overnight had also given investors confidence yesterday.
Australian Wealth Management was the biggest winner of the stocks on the ASX 200 index, soaring more than 20 per cent, or 30.5c, to $1.82 after it announced plans to merge with Select Funds Management. The deal will give the combined operation a market capitalisation of about $840 million.
Gold stocks also benefited from a $US5.63 rise in the spot price for the precious metal to $US550 per ounce. Newcrest Mining jumped 24c to $24.40 and Newmont rose 15c to $7.76, while Lihir firmed 7c to $2.40.