Miners, banks lead the way upward

Investors trained their eyes on the elusive 5000-point mark again yesterday as miners and banks underpinned a rally in the sharemarket.
Despite a weak lead from Wall Street and an early sell-off here, the benchmark ASX 200 index closed 31.8 points higher at 4915.6 - within 41 points of its record last Wednesday. The broader All Ordinaries gained 27.7 points to close at 4859.8.
ABN Amro's head of Sydney trading, Justin Gallagher, said the market had regained its footing yesterday, thanks to the strength of the miners and the financial sector after several volatile trading days last week.
"The fact it's across the whole market, it seems people are of the belief that we are still in pretty good shape going into the reporting season," he said.
Macquarie Bank shares rose more than 3 per cent, or $2.05, to $63.55 on sentiment the stock was "oversold" following the announcement last week its profits would be only "slightly up".
National Australia rose 56c to a four-year high of $35.06, Commonwealth was up 25c to $44.13, ANZ put on 19c to $25.10 and Westpac 23c to $23.58.
In resources, heavyweight BHP Billiton rose 32c to $25.85 and Rio Tinto climbed 82c to $75.57 after a sell-off late last week.
Yet despite the broad rally, Mr Gallagher said investors remained nervous ahead of the main part of the company reporting season, and intra-day volatility was high as people traded on speculation.
Leighton Holdings was one to feel investors' wrath after Goldman Sachs JBWere cut its recommendation to a long-term "sell" from "hold" over concerns the construction company will suffer major losses on its Perth-to-Mandurah rail contract. The stock was the biggest loser of the top 200 listed companies, falling almost 6 per cent, or $1.10, to $18.
"Going into the reporting season we are likely to continue to see this volatility where people speculate about the broader economy and company profits," Mr Gallagher said. "If there is a sniff of bad news, heaven help you."
AWB rose 12c to $4.64 despite analysis from broker JPMorgan suggesting the stock could lose more than half its value to about $2 following the Cole kickback inquiry. Since the inquiry began on January 16, AWB has fallen more than 27 per cent.
The energy sector also rebounded from a fall early on after oil and gas producer Woodside Petroleum suffered from reports it had failed to reach a deal with Mauritania over production-sharing contracts. But the stock rallied to close up 15c to $44. Santos rose 26c to $13.10.
Macquarie Equities private client adviser David Halliday said the market could surpass the 5000-point mark within two or three days provided company earnings results were robust.