A better day, thanks to America's lead

The sharemarket closed higher yesterday after a strong lead from Wall Street but gains were muted by investor concern about local interest rates.
The big banking and resources stocks led the broader market into positive territory.
The ASX 200 index rose 27.7 points to 4986 while the All Ordinaries index was 24.4 higher at 4957.1.
The September share price index contract on the Sydney Futures Exchange rose 29 to 4967 on volume of 18,319 contracts.
CMC Markets dealer Josh Whiting said the local market had recovered some of last week's losses but failed to hold on to all its gains to the close.
"Softer than expected US GDP data on Friday encouraged the bulls by cooling expectations of US rate rises but gains in the local market were capped ahead of the all-important decision from the Reserve Bank of Australia due this Wednesday," he said.
In the US, stocks had rallied on Friday because economic statistics bolstered hopes that the Federal Reserve may soon stop raising interest rates. The Dow Jones Industrial was up 119.27 at 11,219.7.
Australia's largest retailer, Coles Myer, fell 33c to $11.37 yesterday after unveiling a new cost-cutting strategy. Rival Woolworths was up 19c to $19.04.
The resource sector was mixed. BHP Billiton added 7c to $27.77 and Rio Tinto shed 25c to $74.36.
Among the golds, Lihir rose 6c to $2.77 after sticking to its full-year production targets despite a disappointing second quarter. Newcrest firmed 81c to $19.16 and Newmont put on 5c to $6.70.
The spot price of gold was $US638.25, up $US6.10 on Friday's close.
Energy stocks were lower. Woodside fell 21c to $42.79, Santos 8c to $11.50 and Oil Search 1c to $4.12.
The big banks were higher. NAB rose 23c to $35.90, Westpac 7c to $22.00, the Commonwealth 15c to $44.80 and ANZ 15c to $25.25.
St George Bank rose 39c to $28.65 after reaffirming its earnings growth targets for this financial year and the next.
Macquarie Bank rose 70c to $61.85. Macquarie Infrastructure spin-off Sydney Roads Group made a disappointing sharemarket debut because fund managers took quick profits.
Sydney Roads shares sank 12c to $1.03. MIG rose 8c to $2.72.
In the media sector, PBL edged up 1c to $17.10. John Fairfax was steady at $4.00.
News Corp's voting and non-voting shares both firmed 16c to $25.95 and $25.02 respectively.
TV broadcaster Seven rose 21c to $8.99, Ten rose 4c to $2.83 and Austar was up 1c at $1.34.

Interest rate fears mark zigzag week

Shares continued their erratic behaviour yesterday, falling sharply for the second time in three days as the market fretted over the extent of future interest rate rises.
The S&P/ASX200 index slipped back below the 5000 mark, dropping 49.5 points to 4958.3 while the All Ordinaries index was down 43.8 points to 4932.7 at the close of trade.
Nomura Australia equities strategist Eric Betts said that despite the large daily movements in the indices this week, the market was directionless overall ahead of an expected interest rate rise next week.
The All Ords finished the week less than 2 points behind its finish the previous week as news of accelerating inflation stoked interest rate fears.
"Overall we've just been going sideways," Mr Betts said. "It will be another few months before it's clear whether another (interest rate rise) is needed."
He said it was a good environment for day traders: "We are telling people to buy on the zigs and sell on the zags."
Interest rate-sensitive stocks again took the brunt of the selling. The big four banks lost ground with Westpac sinking 39c to $21.93, ANZ losing 38c to $25.10, the Commonwealth Bank dropping 45c to $44.65 and National Australia Bank down 8c to $35.67.
The local losses followed weakness on Wall Street where Microsoft, the world's largest software maker, led the market lower.
The Dow Jones industrial average dropped 2.08 points to 11,100.43 while the Standard & Poor's 500 index slipped 5.20 points to 1263.20.
The Nasdaq Composite index fell 15.99 points to close at 2,054.47.
On the local market the big miners also lost ground with BHP Billiton slipping 41c to $27.70 and Rio Tinto down 48c to $74.61.
Mining equipment retailer Emeco made a disappointing market debut with its shares closing 10.5c below the issue price at $1.795.
Rupert Murdoch's News Corporation gave up 33c to end at $25.79 while the non-voting stock dropped 11c to $24.86.
Other media stocks were also weaker with Publishing and Broadcasting tumbling 44c to $17.09, Fairfax sliding 11c to $4 and Seven Network dipping 19c to $8.78.
Oil and gas stocks were mixed with Woodside Petroleum falling 25c to $43.00 while Santos climbed 16c to $11.58 despite news that a mystery bidder could rival its offer for Delhi Petroleum.
Mayne Pharma surged 26c to $2.76 after the drug maker lifted its profit guidance on the back of strong sales of its anti-cancer drugs.
Pacifica Group sank 35c to $2.12 after the car-parts maker said it had rejected a proposed takeover bid of $2.40 a share following discussions with an unnamed party.
And Lion Nathan fell 7c to $7.91 as the beer and wine group confirmed its underlying earnings guidance for fiscal 2006.
The big food and liquor retailers were weaker with Coles Myer falling back 10c to $11.70 and rival Woolworths dipping 15c to $18.85.
Telstra eased 1c to $3.79 while Optus owner Singapore Telecommunications moved 1c in the opposite direction to $2.12.
Emeco was the top traded stock by volume with 64.45 million shares worth $116.86 million changing hands, according to preliminary calculations.
Preliminary market turnover was 1.12 billion shares worth $5.34 billion with 475 stocks rising, 576 falling and 319 unchanged.

Shares bounce back over 5000

The sharemarket closed higher yesterday, re-entering the 5000-point range, with the banks leading the staged recovery from Wednesday's slide.
The ASX 200 index gained 72.1 points to 5007.8 while the All Ordinaries finished 68.9 points higher at 4976.5.
Macquarie Equities associate director Lucinda Chan said the volatility in the market was unbelievable as the market rebounded from Wednesday's inflation data.
"Yesterday was up and then dropped like a tonne of lead and then today it looks like it's eased back like nobody's business," Ms Chan said.
"We are just recovering heavily from yesterday's losses."
The market's solid performance was spearheaded by the big banks. Westpac gained 22c to $22.32, NAB added 75c to $35.75, CBA piled on 85c to $45.10 while ANZ rose 19c to $25.48.
Macquarie Bank lifted $1.78 to $62.60, St George rose 37c to $28.77 and Bendigo lifted 8c to $12.22.
Adelaide Bank jumped 25c to $13.10 after confirming that it was on track to achieve targeted cost reductions and earnings per share growth.
Bank of Queensland was up 4c at $13.93 but ambitious Bundaberg building society Wide Bay Australia was down 14c at $11.30.
BHP Billiton rallied 41c to $28.11 and Rio Tinto rose $1.58 to $75.09.
Higher oil prices helped energy stocks, with Woodside rising 40c to $43.25 and Oil Search 7c to $4.20.
Santos rose 17c to $11.42 after posting a record first-half sales revenue and production, saying it would meet its annual production targets.
Retailer David Jones rose 15c to $2.97 after lifting its second half guidance on solid fourth quarter sales.
Coles Myer added 18c to $11.80, Harvey Norman rose 14c to $3.49 while Woolworths was steady at $19.
Shares in Just Group rose 13c to $3.30 after chief financial officer Jason Murray became the fashion retailer's new chief executive.
Embattled wheat exporter AWB was forced to slash profit forecasts for 2005-06 by 25 per cent as the drought continues, pushing its shares 5c lower to $3.85.
GUD slid 51c to $7.90 after it pointed to a challenging year ahead for profit growth as it reported a 32 per cent increase in earnings for 2005-06 to $40.19 million.
Trust Company of Australia, down 6c to $10.59, said it was on track to achieve an 8 per cent lift in fiscal 2007 underlying earnings.
West Australian utility Alinta flagged a strong interim result thanks to the weather. Alinta jumped 40c to $10.36.
The goldminers drifted, with Newcrest steady at $18.75, Newmont picking up 1c to $6.91 and Lihir up 9c to $2.79.
Kingsgate Consolidated rose 20c to $4.70 after posting higher production in the last quarter.
Nickel miner Jubilee is tipping lower production in 2006-07 but said it remained confident of building its production in future years. Its shares fell 30c to $8.65.

Shares, bonds fall: rate rise looms

Australian stock and bond markets have tumbled and the dollar has strengthened after worse than expected inflation data confirmed an interest rate rise is almost certain next week.
And with consumer prices rising at their fastest rate in six years in the June quarter - up 1.6 per cent - thanks to rising oil and fruit prices, markets are already anticipating yet another interest rate rise later this year.
The benchmark ASX 200 index fell 56.7 points or 1 per cent to 4935.7 and bond prices fell too, pushing the yield on the benchmark two-year bond to a four-year high of 6.03 per cent.
The Australian dollar traded in a half cent range against the greenback and was trading at US75.65c last night.
The ABS data, showing annual inflation now well above the Reserve Bank's target range at 4 per cent, combined with high petrol prices, record low unemployment and rising wages, have most investors betting on a rate rise next week.
"We now see a near certain probability of a 25 basis point rate hike next week, with an outside chance of 50 basis points," Westpac strategists said.
"Assuming a 25 basis point August rise, we also now expect a further 25 basis point rise in November."
Robert Cunneen from AMP Capital said that while investors found the numbers "alarming", a rate rise next week would suffice.
"If anything, the case for the 25 basis points move in the August or September period is still a close call. Hence financial markets pricing in a 6.25 per cent cash rate by year end are being overly pessimistic."
But the prospect of rising interest rates unnerved investors on the sharemarket.
Craig James, chief equities economist at CommSec, said: "Interest-rate-sensitive areas of the sharemarket such as banks and retailers are likely to experience more challenging conditions over coming months."
Retail stocks were among the biggest losers amid fears higher mortgage repayments and continuing high petrol prices will force consumers to tighten their belts.
Shares in discretionary retailers such as CD and DVD retailer JB Hi-Fi, down 20c to $4.70, and surfwear company Billabong, down 57c to $14.30, were as much as 4 per cent weaker.
Just Group and David Jones shares fell 3 per cent.
Lenders and insurers also fell amid fears margins will suffer as interest rates rise. Westpac fell 30c to $22.10 and ANZ fell 32c to $25.29.
Other financial stocks were weaker including Macquarie Bank, Bank of Queensland, Challenger Financial and Axa Asia Pacific, which all fell 3 per cent. AMP and Perpetual fell 2 per cent.
Shares in construction companies also slipped on fears higher interest rates will hit home building. Boral fell 26c or 3 per cent to $7.40 and cement maker Adelaide Brighton fell 3c to $2.43.
Investors fear the coming full year reporting season will show profit margins being squeezed by higher input and labour costs.
Despite yesterday's falls, the sharemarket remains up about 4 per cent in 2006.

US, BHP give investors heart to resume buying

The Australian sharemarket closed stronger yesterday, boosted by strength in the US markets and a good production report from global miner BHP Billiton.
Uranium stocks also surged in the wake of Kim Beazley's bid to swing the ALP into approving more than just three uranium mines.
On Wall Street overnight the Dow Jones rose 182.67 points to 11,051.05.
"We did see quite a bit of life in the big end of the resources market," said CMC Markets market analyst David Land.
"The production results coming out from BHP certainly reaffirmed the fact that profitability for a number of these miners can continue to grow, particularly those that are reinvesting profits back into growing production."
The ASX200 index was 58 points higher at 4992.4 while the All Ordinaries gained 53.3 to 4959.9. On the Sydney Futures Exchange, the September share price index contract ended day trading 45 points higher at 4960, on a volume of 14,537.
BHP Billiton was up 51c to $27.83 after posting record annual production in aluminium, copper, iron ore, nickel and natural gas, but petroleum production was flat and crude oil output fell.
Rio Tinto was up $1.19 at $73.20.
Oil and gas producer Woodside grew 50c to $43.75.
Papua New Guinea oil producer Oil Search firmed 7c to $4.21 after standing by its full year production forecast despite a second quarter marred by production problems.
Hardman Resources and small Cooper Basin producer Beach were both up 5c at $1.60, though Hardman is well off its highs and Beach quite close to its.
Uranium stocks jumped. Paladin Resources climbed 22c to $4.21 and Uranium Ex firmed 3.5c at 31.5c.
Oxiana spin-off Toro Energy jumped 10.5c to 86c after announcing a $3 million farm-in to Stellar Resources' Gawler Craton uranium-gold-copper prospects. Stellar was up 2c to 42c.
The big banks were all up, NAB improving 67c to $35.27, Westpac 29c to $22.40, ANZ 27c to $25.61, and the Commonwealth 41c to $44.62.
St George was up 23c at $28.73 and acquisitive Bundaberg building society Wide Bay Australia was up 14c to $11.44.
Telstra picked up 2c to $3.84, and Optus-owner Singapore Telecom lost 1c to $2.08.
Retailer Coles Myer was up 20c at $11.70 and supermarket rival Woolworths rose 41c to $19.28.
In the media, News Corp added 33c to $25.69 while its non-voters were also 33c higher at $24.63.
Publishing and Broadcasting lifted 8c to $17.70 and Fairfax improved 3c to $3.97.
Among gold stocks, Newcrest was up 25c to $19.14, Lihir was 6c better off at $2.74 and Newmont was steady at $6.80.
The price of gold in Sydney was $US621.50 a fine ounce, up $US7.85 on Monday's close.
Among other stocks, biotechnology firm Chemeq was steady at 41.5c after being fined $500,000 by the Federal Court for failing to disclose market sensitive information.
Garage-door maker Alesco slid 5c to $8.90 despite delivering a record underlying net profit for 2005-06.
The top traded stock by volume was food company Goodman Fielder, with 30.9 million shares worth $62.53 million changing hands. Goodman Fielder was up 4c to $2.04.
National turnover was 972.4 million shares worth $3.99 billion, with 615 stocks up, 447 down and 318 unchanged.

Inflation data spooks bourse

The Australian share market finished lower yesterday as falling base metal prices hit the big miners and local inflation figures stoked fears of an imminent rate increase.
Investors were rattled by an Australian Bureau of Statistics report showing producer prices rose by more than expected in the June quarter.
The result has laid the foundation for an interest rate rise next month, analysts said.
But the market is still awaiting the June-quarter consumer price index numbers tomorrow to confirm the strength of the threat.
Aequs Securities institutional dealer Ric Klusman said the bourse was "extremely quiet" ahead of the big inflation announcement.
"Overall, people are very nervous ahead of the inflation figures, which will come out on Wednesday," he said.
The benchmark S&P/ASX 200 ended 26.2 points lower at 4934.4 points while the All Ordinaries fell 27.7 points to 4906.6 points.
Despite market expectations of an upcoming record $US3.5 billion ($4.67 billion) first-half profit for mining giant Rio Tinto, the company's stock dipped $1.79 to $72.01.
Rival and market leader BHP Billiton lost 84c to $27.32.
The banks were mostly weaker with National Australia Bank dropping 4c to $34.60, ANZ shedding 4c to $25.34 and Westpac losing 4c to $22.11.
However, Commonwealth Bank added 11c to $44.21.
Shares in Newcrest Mining enjoyed a 49c boost to $18.89 after the local gold mining megalith reported increased fourth-quarter production. But rival gold miner Newmont reversed 18c and Lihir Gold lost 11c to $2.68 as the price of gold fell.
Spot gold closed at $US613.65, down $US10.20 on Friday's close.
Elsewhere, zinc and lead miner Zinifex lost 3c to $9.91 despite setting new annual production levels at its flagship Century mine.
Oil producer Woodside Petroleum backtracked 25c to $43.25 and Oil Search slipped 2c to $4.14. But rival Santos found 2c to $11.40.
Among the big media stocks, News Corporation lost 20c to $25.36 and its non-voting scrip dropped 15c to $24.30.
Publishing and Broadcasting Ltd slipped 16c to $17.62, Fairfax gave up 3c to $3.94 but Seven Network edged up 2c to $8.66.
Retailer Coles Myer gained 11c to $11.50 while rival Woolworths lost 12c to $18.87.
Telstra was steady at $3.82 while Singapore Telecommunications rose 1c to $2.09. The top-traded stock by volume was Conquest Mining, with 29.15 million shares worth $12.70 million changing hands. Conquest was 7c higher at 43.5c.
National market turnover was 801.08 million shares worth $3 billion, with 401 stocks up, 640 down and 324 unchanged.
On the Sydney Futures Exchange the September share price index contract finished 27 points weaker at 4915 on a volume of 12,440 contracts.

Resources drag down bourse

Investors were forced to go back to the drawing board on Friday after the market failed to capitalise on a 2 per cent bounce the previous day because of a weak lead from the US and flagging resource stocks.
The conflict between Israel and Hezbollah forces in Lebanon played havoc with markets early in the week but this was offset on Thursday when the US Federal Reserve indicated a pause in its fight against inflation.
Nevertheless, the less hawkish comments from Fed chairman Ben Bernanke failed to stimulate investor sentiment for a second day and the local market posted its second consecutive weekly fall.
Resource stocks fell mainly because of weaker metal prices, especially for copper and zinc, and worked to drag the bourse down.
The benchmark ASX 200 index slumped 35.9 points to 4960.6 on Friday, and was down 5.5 points over the week - almost 8 per cent less than its record high on May 11.
The broader All Ordinaries also fell 33.1 points to 4934.3 on the day and was down 9.5 points over the five trading days.
ABN Amro's head of Sydney sales trading, Justin Gallagher, said the market fell because of a weak lead from the US, where earnings from some blue-chip companies were disappointing, and a drop in local resource stocks.
"It was a very short-lived euphoria after Bernanke's speech," he said. "The main reason we weren't down more [on Friday] was good performances from Axa, ANZ and Westpac.
"It is still a fickle market out there … and the performance is indicative of the nervousness. At the end of the day we are probably no better off than we were before Bernanke's speech - it's back to the drawing board."
Investors remain on tenterhooks about the impact of the conflict in the Middle East on the oil price. Brokers believe oil will reach $US80 a barrel in coming weeks, which would resurrect inflationary fears. But Argo Investments managing director Rob Patterson said the conflict had gone some way to do the "Fed's job for them" in combating inflation.
"They are slowing down financial markets' momentum, creating nervousness amongst consumers, which probably makes less need for a further interest rate rise," he said.
Rio Tinto fell $1.91 to $73.80 on Friday - down 0.3 per cent on the week - while rival BHP Billiton dropped 64c to $28.16 on the day but was up 9c over the five days.
Colorado was one of the biggest winners of the top 200, gaining more than 7 per cent this week after Affinity Equity Partners lodged a $430 million takeover bid for the clothing retailer. The stock closed 2c higher at $4.60.
Andrew Forrest's Fortescue Metals also rose almost 8 per cent over the week after Leucadia National agreed to pump $535 million into the company to start its $2.5 billion iron ore venture in the Pilbara. The stock rose 5c to $10.15 on the day.
But Hardman Resources fell more than 14 per cent over the five days because of production problems in Mauritania, and closed unchanged at $1.59 on Friday.
The market will continue to be a slave to movements in offshore indices until the reporting season begins late next week when Adelaide Bank, GUD and Australand deliver their earnings figures.
CommSec's chief equities economist, Craig James, said he expected a solid but unspectacular profit reporting season and forecast aggregate earnings would rise by about 15 per cent.

Investors chase miners and banks

The sharemarket staged a fightback yesterday with a strong lead from Wall Street helping to boost the big banking and resource stocks.
Man Financial senior adviser Anthony Anderson said the market had a "much better day" and had been boosted by indications that US interest rates could soon stop rising.
"At the end of tightening cycles we generally see very strong markets and people are starting to get wind of this," he said.
After a series of falls this week, the ASX 200 index climbed 96.4 points to 4996.5 while the All Ordinaries rose 86.1 to 4967.4.
The strong local gains came after a rally on Wall Street overnight, where comments from the Federal Reserve chairman hinted the central bank could be close to ending its campaign of interest rate rises.
The Dow Jones index soared 212.19 points to 11,011.42.
The big mining stocks made strong gains with BHP Billiton shooting up $1.57 to $28.80 and Rio Tinto racing ahead $3.26 to $75.71 after a solid second quarter production report.
Mid-tier miners also moved ahead with Oxiana climbing 17c to $3.28 after reaffirming its full-year gold production forecast and Iluka rising 17c to $6.84 after boosting production and revenue in the second quarter. Bendigo was up 1.5c at $1.545.
In banking, NAB rose 88c to $34.75, the Commonwealth jumped $1.10 to $44.15, Westpac gained 72c to $22.07 and ANZ rose 64c to $25.29.
Macquarie Bank rose 13c to $62.95 after lifting its profit in the first quarter and saying it expected a higher annual result.
PBL fell 14c to $17.78, John Fairfax dipped 2c to $4.03 but Ten Network rose 2c to $2.92.
Oil and gas stocks were mixed with Santos rising 14c to $11.40 while Woodside sank $1.90 to $43.90 after its record-breaking half-year revenue was tarnished by problems at the Chinguetti oilfield in Mauritania.
CuDeco had another roller-coaster ride after extending the size of its Las Minerale deposit. Shares in the former Australian Mining Investments soared to $3.79, up $1.51 or 66.2 per cent.
The Adelaide oil and gas explorer Austin Exploration - which has prospects in Australia, the US and India - listed at 22.5c, up on its issue price of 20c, before closing at 20c.
Securities in Pelorus Property Group listed at a 5c premium to its 50c issue price and closed at 60.5c, off a high of 65c.
Takeover target Colorado Group rose 6c to $4.58 after the clothing and shoe retailer said predator Affinity Equity Partners had indicated an offer of $4.68 cash per share in confidential and private approaches.
Metcash rose 6c to $3.87 after the grocery wholesaler said the integration of Foodland was on track to generate forecast earnings benefits.
Elsewhere, Coles Myer fell 10c to $11.45 and Woolworths dropped 30c to $19.30. David Jones rose 1c to $2.85 after it revealed plans to open new shops and add fresh brands.
Telstra put on 2c to $3.80 while Telecom NZ added 3c to $3.39 and was the top traded stock of the day with 72.68 million shares worth $241.72 million changing hands.
Gold stocks were mixed with Newcrest dropping 7c to $18.72, Lihir up 11c to $2.86 and Kingsgate rising 4c to $4.64.

Profit takers undo day's strong start

The stockmarket ended weaker yesterday after profit takers sparked a late sell-off, dragging the bourse down after a good start.
The market had been enjoying a lift on the back of a positive US lead and a lower oil price.
"Some nervous Nellies and profit takers are around today - there's no other objective reason why the market would reverse the upward drift it's been holding for most of the day," said Austock Brokers senior client adviser Michael Heffernan.
The late drop could provide bargain opportunities today, Mr Heffernan said.
The ASX 200 index fell 23.2 points to 4900.1 and the All Ordinaries 20.1 to 4881.3.
The September share price index contract on the Sydney Futures Exchange fell 11 points to 4886 on a volume of 15,425.
Miner Rio Tinto fell 5c to $72.45 after reporting a 4 per cent boost in iron ore production to record levels for the second quarter and a 9 per cent boost in its copper production. Rival BHP Billiton lost 18c to $27.23.
After a happy start, the banks ended badly. The Commonwealth fell 25c to $43.05, NAB 5c to $33.87, ANZ 16c to $24.65 and Westpac 6c to $21.35.
Building products group Rinker was smashed after rebounding as high as $13.94. It closed at $13.56, down 19c.
Oil producers suffered after a 2 per cent fall in crude oil futures overnight.
Woodside fell 43c to $45.80, Santos 21c to $11.26 and Hardman was down 2c at $1.715. Oil Search rose 4c to $4.15.
Shares in Macquarie Airports edged up 2c to $3.10 after Sydney Airport, of which MAp is the major shareholder, lifted annual earnings by 6.1 per cent.
Stockbroker and financial software provider IWL firmed 5c to $4.35 after posting an 88 per cent rise in annual operating EBITDA to $27.8 million.
In media, News Corp fell 7c to $26.04 and its non-voting scrip gained 15c to $24.92, Publishing & Broadcasting lifted 19c to $17.92 and Seven Network fell 7c to $8.58.
Telstra fell 3c to $3.78.
Chunks came out of the big goldminers as the price of gold took a dive. Lihir fell 15c to $2.75, Newcrest 33c to $18.79 and Newmont 10c to $6.95. Bendigo was up 7c at $1.53.
Gold closed Sydney trading at $US628.10 per fine ounce, down $US23.75 from Tuesday.
The day's top traded stock was again explorer Sundance Resources with 36.19 million shares swapping hands with a total value of $3.66 million. The shares rose 0.5c to 10.5c as the company prepares a pre-feasibility study on the potentially 35mtpa Mbalam iron ore project in Cameroon.
Market turnover was 933.38 million shares worth $3.56 billion.

Bargain hunters curb ASX losses

The sharemarket closed weaker yesterday but managed to claw back sharp early losses to finish only slightly in the red.
The ASX 200 index fell 9.9 points to 4956.2 while the All Ordinaries fell 11.6 to 4932.2.
Man Financial broker Anthony Anderson said the bourse was showing signs of recovery from big hits triggered by outrages in the Middle East.
"My gut feeling is that the worst of it was on Friday," Mr Anderson said. "Once people saw today that there wasn't any massive amount of selling, people thought it might be an opportunity to dip their toes into some quality stocks."
Retail stocks were the big winners of the day, he said.
"We've seen some first pay packets with the new tax rates, and the consumer sector is really one of the strongest features of the market."
Mr Anderson added that commodities stocks had also been saved from big falls by stronger commodities prices.
Coles Myer fell 13c at the opening to $11.32 but finished 15c higher at $11.60. Woolworths gained 21c to $20.02, Harvey Norman rose 13c to $3.69 and Coca-Cola Amatil was up 4c at $7. But David Jones eased 5c to $2.77.
In the resources sector, BHP Billiton closed down 9c at $27.98 but Rio Tinto was 26c higher at $74.31.
Santos rose 9c to $11.86 after boosting its stake in the Cooper Basin joint venture through the $474 million acquisition of Delhi Petroleum. Origin, a junior party in the Cooper Basin joint venture, rose 17c to $7.52.
Woodside climbed 49c to $46.50 and Oil Search lifted 3c to $4.21. Beach Petroleum closed down 5c at $1.70 after hitting a post-1994 high of $1.78.
CuDeco, formerly Australian Mining Investments, plunged $3.55 or 49.9 per cent to $3.56 after the explorer issued a report that roughly halved the inferred resource at its Rocklands copper project in Queensland.
Oil junior Incremental Petroleum jumped 30c to $1.84 after announcing that its Turkish oilfield had proved and probable reserves of 12.04 million barrels.
Coal-seam gas developer Sydney Gas was steady at 27c after appointing Phillip Moore as its new chief executive to replace acting boss Stephen Kwik after a seven-month search.
Shares in Zenyth Therapeutics, the old Amrad, jumped 28.5c or 53 per cent to 82.5c after CSL made a $108 million takeover bid. CSL fell 78c to $50.
Shannon Resources listed at a solid premium after raising $2.6 million in the public issue. The gold explorer opened at 30c, well up on the 20c issue price, and closed at 35c.
Other goldminers rose, with Newmont up 13c to $7.38 and Newcrest 8c firmer at $19.60.
Banks fell, with the Commonwealth off 8c at $43.50, NAB down 11c to $34.25, ANZ 30c weaker at $25 and Westpac 11c lower at $21.60.
In media, PBL edged up 2c to $17.84, Seven slid 20c to $8.45, Ten was steady at $2.93 and John Fairfax eased 5c to $4.05.
Telstra lost 1c to $3.83.
The top traded stock was Empire Oil, up 0.1c to 0.7c, with 19.05 million shares worth $132,058 changing hands.

Market edges higher thanks to higher commodity prices

The Australian sharemarket closed firmer yesterday as higher commodity prices and a stronger Wall Street lead pushed the bourse up.
The ASX200 index rose 21.1 points to 5128.3 while the All Ordinaries added 22 to reach 5093.4 at the close.
On the Sydney Futures Exchange, the September share price index contract was up 4 points to 5104 on a volume of 10,436 at about 4:30pm.
An ABN Amro private client adviser, Bill Bishop, said the mining stocks and a firmer lead from Wall Street had buoyed the market.
"That's partly a function of the good performance of the metals market overnight - most of the base metals are up," he said.
"We've done pretty well but there are huge amounts of investment cash sitting on the sidelines waiting for an opportunity to get into the Australian stockmarket."
Rio Tinto lifted $1.31 to $78.56 while rival miner BHP Billiton rose 57c to $29.50.
US stocks rose on Tuesday after a rally in the shares of the semi-conductor company KLA-Tencor Corp erased early losses.
The Dow Jones industrial average rose 31.22 to end at 11,134.77.
Australian banking stocks were mostly weaker, with Westpac down 36c to $22.17, the Commonwealth falling 30c to $44.90, ANZ slipping 25c to $26.45, St George Bank dropping 30c to $29.42 but National Australia Bank gaining 2c to $35.80.
QBE Insurance lifted 67c to $21.20 after it said it would issue £300 million ($737 million) in perpetual securities to replace short-term bank debt.
Insurance Australia Group dropped 5c to $5.34, Promina dipped 2c to $5.48 and Suncorp-Metway slipped 6c to $19.43.
Retailer Coles Myer fell 27c to $11.72 after it announced job losses yesterday after the closure of distribution centres in NSW and Victoria.
Woolworths climbed 4c to $20.08, Harvey Norman fell 3c to $3.82 and David Jones lost 2c to $2.87.
Internet gaming group Betcorp shares slumped 30c to $3.80 after it announced plans to quit the Australian Stock Exchange and make its primary listing on the second board in the United Kingdom.
Media stocks were mixed. News Corp slipped 18c to $26.67 and its non-voting stock retreated 27c to $25.28, while Publishing and Broadcasting Ltd eased 24c to $17.99. The Seven Network rose 8c to $8.42, Ten Network lifted 5c to $2.85 and John Fairfax rose 10c to $3.90.
Just before 5pm the spot price of gold in Sydney was $US641.00 a fine ounce, up $US13.75 on Tuesday's close.
Gold stocks were mixed, with Newcrest Mining falling 1c to $20.41, while Lihir Gold gained 8c to $3.10, Newmont Mining was up 14c to $7.36 and Kingsgate Consolidated put on 12c to $5.02.
In the oils, Woodside put on 64c to make $46.30, Hardman rose 14.5c to $1.94, Oil Search was up 6c at $4.26 and Santos was up 11c at $11.40.
Santos is in talks with Westpac to acquire Delhi Petroleum Pty Ltd for about $480 million to increase its share in the Cooper Basin ventures to more than 80 per cent.
The top traded stock by volume was Cape Range Wireless, with 230.54 million shares worth $1.32 million changing hands. The company's share price rose 0.1c to 0.8c.
Turnover was 1.24 billion shares worth $3.81 billion with 615 stocks rising, 443 falling and 304 unchanged.

Shares drift lower on home loans data

The stockmarket drifted lower in light trade yesterday with rising home loan approvals and political uncertainty helping to dampen the mood.
Macquarie Equities private client adviser David Halliday said the release of data showing record home loan approvals in May, which prompted talk of a further interest rate rise, had carved about 15 points off the indices.
He said the battle between Prime Minister John Howard and Treasurer Peter Costello had also been a factor.
"Whilst there is no major impact directly to the market, markets hate uncertainty," he said.
The ASX200 index dropped 35.6 points to 5107.2 while the All Ordinaries slipped 31.5 to 5071.4.
On the Sydney Futures Exchange, the September share price index contract ended down 47 points at 5100 on volume of 11,910.
The big mining stocks lost ground with BHP Billiton falling 16c to $28.93 and Rio Tinto tumbling 96c to $77.25.
The top four banks were also weaker, with Westpac sinking 38c to $22.53, NAB falling 49c to $35.78, the Commonwealth declining 35c to $45.20 and ANZ losing 14c to $26.70.
Media companies were among the few stocks making gains after Communications Minister Helen Coonan said federal cabinet had made a decision on media reform and a formal announcement was due later this week.
News Corp climbed 15c to $26.85 and its non-voters 5c to $25.55, PBL rose 7c to $18.23 and Fairfax firmed 1c to $3.80.
Uranium developer Paladin Resources sagged 19c to $4.39 after announcing a friendly takeover offer for explorer Valhalla Uranium, which shot up 17c to $1.39.
OFM Investment raced ahead 14c to $2.40 after the property-based fund manager acquired private property funds manager Century Funds Management for $42.4 million.
Macquarie Bank slipped 50c to $67.52 after Macquarie Mortgages announced it had acquired Canadian mortgage broker Cervus Financial Corp for $C12.5 million ($15 million).
Retailers were weaker with Woolworths falling 15c to $20.04 while rival Coles Myer fell 20c to $11.99.
Telstra defied the market gloom to climb 6c to $3.84 and was the top traded stock of the day with 27.10 million shares worth $103.77 million changing hands.
The spot price of gold in Sydney ended down $US1.40 on Monday night's close at $US627.25 per fine ounce.
Gold stocks backtracked with Newcrest sliding 24c to $20.42, Lihir declining 3c to $3.02 and Kingsgate down 17c at $4.90.
Oils too were weaker. Woodside was down 46c to $45.66, Santos 16c to $12.29 and Hardman 2c to $1.795. Oil Search was up 2c to $4.20 on talk of an Indian connection.
Market turnover was 959.98 million shares worth $3.51 billion with 493 stocks rising, 561 falling and 317 unchanged.

Investors shrug off bad day on Wall St

The stockmarket closed slightly higher yesterday, shrugging off weakness in New York on Friday in what is traditionally a strong month for local shares.
Retailer Coles Myer was the standout in an otherwise quiet day of trading, brokers said.
The ASX 200 index was up 7.5 points at 5142.8 while the All Ordinaries gained 6.4 to 5102.9.
ABN Amro Morgans Ipswich manager Tony Russell said the market had held up admirably, considering the negative lead from Wall Street.
"The US market was dragged down on Friday night by some local issues so the local market has decided it won't affect global markets," he said.
"July tends to be a stronger month anyway with the influx of superannuation fund money into the market."
Coles Myer jumped 30c to a record close of $12.19 after completing a better-than-expected $837 million share buyback. Rival Woolworths eased 1c to $20.19.
Market leader BHP Billiton rose 4c to $29.09 while Rio Tinto shed 13c to $78.21.
Iron ore developer Fortescue Metals soared 90c to $10.50 after confirming negotiations for an equity placement worth more than $US270 million ($359.8 million) with Hong Kong commodities trader Noble Group.
Mutiny Gold had a bumpy start to public life. Shares in the junior explorer began trading on par with the issue price of 20c but ended the day down 4c at 16c.
The big banks were broadly higher. The Commonwealth put on 40c to $45.55 and NAB added 9c to $36.27 while Westpac eased 29c to $22.91.
ANZ edged up 2c to $26.84. The bank has completed the $US111.5 million ($148.6 million) acquisition of 20 per cent of China's Tianjin City Commercial Bank.
Shares in CFK Childcare fell almost 17 per cent in morning trade after the childcare service provider forecast a $3.1 million to $3.35 million operating loss for 2005-06.
The shares rebounded to close down 6c at 40c.
CFK had previously said it would report a full-year loss of $1.7 million.
Among media stocks, PBL rose 7c to $18.16 and John Fairfax gained 3c to $3.79.
Telstra put on 3c to $3.78.
Qantas rose 2c to $3.07 while Virgin Blue added 3.5c to $1.645.
Goldminer Newcrest fell 29c to $20.66 after warning that its net profit for 2006-07 would not be as high as some expected but more than the result of the previous year.

Share prices head back up as market ripples settle

The sharemarket closed higher on Friday after starting to cast off some of the volatility of recent months.
The S&P/ASX 200 index increased 15 points to 5135.3 and the All Ordinaries 18.4 to 5096.5.
Market leader BHP Billiton rose 25c to $29.05 and Rio Tinto 75c to $78.34.
The banks were mixed. National Australia Bank rose 16c to $36.18 and ANZ 4c to $26.82. Commonwealth Bank fell 20c to $45.15 and Westpac 8c to $23.20.
Newcrest was one of the biggest movers. The goldminer fell $1.25 to $20.95 after announcing net profit for 2006-07 would not be as high as some analysts had expected.
Until the announcement, there had been speculation Newcrest might be a takeover target.
Rival goldminer Newmont fell 5c to $7.45 and Lihir Gold was steady at $3.03.
Oil producer Woodside Petroleum rose 41c to $46, Santos 4c to $12.38 and Oil Search 12c to $4.25. Oil fell US0.05c last night to $US75.14 a barrel.
ASX rose 56c to $33.95 after reporting a 26 per cent lift in annual net profit thanks to record trading levels. The figure is unaudited and a full profit report is due in August.
SFE, which merges with ASX on July 25, rose 30c to $17.30.
Shares in child care provider ABC Learning Centres rose 6c to $6.83 after it announced a friendly $96.2 million off-market takeover offer for Hutchison's Child Care Services.
Hutchison's, which backs the offer, rose 22c to $1.47.
In media, News Corp fell 11c to $26.75 and its non-voting stock 22c to $25.36. PBL rose 26c to $18.09 and John Fairfax 5c to $3.76.
Retailer Woolworths rose 10c to $20.20 and Coles Myer 17c to $11.89.
Telstra was steady at $3.75.
The top traded stock by volume was Extract Resources, with 53.25 million shares worth $5.04 million changing hands. Extract rose 1.2c to 9.8c.

Market skips over US preoccupations

The sharemarket closed higher, recovering from earlier falls as investors marked time ahead of the release of important job figures in the US tonight.
The benchmark ASX 200 index rose 23.4 points to 5120.3 while the All Ordinaries rose 23.8 points to 5078.1.
The bourse managed to recover from earlier losses, which were spurred on by concerns on Wall Street that job market strength may persuade the US Federal Reserve to keep raising interest rates.
"The Australian sharemarket had a spell of tentativeness for an hour or so today and then that sort of dissipated to be on the positive side," Bell Potter senior adviser Stuart Smith said.
The market's early decline came after US stocks weakened further amid worries about North Korea's test firing of missiles. The Dow Jones index fell 76.20 points to 11,151.82.
Coalminers were in demand after Excel Coal accepted a friendly takeover bid from America's Peabody Energy Corp for $1.83 billion in cash, or $8.50 a share. Excel rose 28c to $8.68.
Fat Prophets senior resources analyst Gavin Wendt said the NSW miner should have been able to push the bidding price up to $2 higher.
"This is a tremendously low offer and given the growth prospects of the resource sector I would have thought shareholders would be demanding a price well above current levels," he said.
Centennial Coal rose 30c to $3.51 while Macarthur Coal added 38c to $5.21.
Rio Tinto rose 19c to $77.59 while BHP Billiton was steady at $28.80. Woodside Petroleum rose 14c to $45.59, Santos gained 8c to $12.34 and Oil Search rose 5c to $4.13.
Commonwealth Bank added 32c to $45.35, ANZ was steady at $26.78, NAB climbed 31c to $36.02 and Westpac rose 16c to $23.28.
Macquarie Bank fell $1.37 to $67.34 after it agreed to buy US utility Duquesne Light Holdings for $US1.59 billion ($2.14 billion), expanding its infrastructure interests in the US.
"It has rallied 10 per cent or so in the last month. There will be quite a few hedge funds trading the volatility of that stock at the moment," ABN Amro Morgans adviser Kylie Macdonald said.
Shares in Wattyl sank to a low of $2.78 before closing 24c weaker at $3.01 after the competition regulator blocked a proposed takeover by Barloworld.
A disappointed Barloworld chief executive Tony Phillips said the company would now restructure its Australian operations.
Macquarie Office Trust, down 0.5c to $1.36, said it had revalued 14 of its Australian and US assets by $187 million, 12.6 per cent higher.
Qantas rose 3c to $3.12 despite ratings agency Moody's Investors Service saying the airline faced a tough operating environment over the next few years and possibly lower profit growth.
Qantas also signed a code-share agreement with Mexican airline Mexicana in a bid to expand further into the Americas. Rival Virgin Blue rose 3c to $1.58.
Telstra was steady at $3.75 while Optus parent Singapore Telecom rose 2c to $2.17.
In the gold sector, Newcrest Mining rose 45c to $22.20 while Newmont fell 4c to $7.50.

Bourse's high hopes fail to hold ground

The sharemarket closed weaker yesterday after giving away earlier gains that were made despite the absence of a lead from US markets.
The major banks ended mixed and the big miners weakened.
"It's been a pretty flat finish," CMC Markets market analyst David Land said.
Mr Land said it was surprising that the big miners had not advanced, given solid trading for base metals in London overnight. He said the banks had performed solidly and the gold sector had benefited from a resurgent gold price in Asian trading.
The ASX 200 index was down 7.8 points at 5096.9 while the All Ordinaries dipped 6.4 to 5054.3.
Among the big movers were Australian Mining Investments, which went into a trading halt amid feverish speculation about a major copper discovery and possible takeover bid from Swiss mining group Xstrata.
The stock, which was 32c five weeks ago, traded as high as $10 yesterday morning and was last quoted at $7.11, up $1.86 on Tuesday's close.
Shares in Ansell fell 62c to $8.55 after the gloves and condom maker said its current year earnings would slide because of high latex prices.
The Reserve Bank left official interest rates unchanged at 5.75 per cent. The central bank last lifted interest rates by 25 basis points to 5.75 per cent in May.
NAB dipped 2c to $35.71, Westpac sagged 3c to $23.12, but ANZ lifted 14c to $26.78 and CBA added 18c to $45.03.
BHP Billiton fell 39c to $28.80 and Rio Tinto dropped 87c to $77.40. Woodside Petroleum rose 28c to $45.45, Santos shed 9c to $12.26 and Oil Search fell 3c to $4.08.
Beach Petroleum put on 3c to hit $1.58. Its Bass Strait associate, Anzon, reported a 7105 barrels a day retest on its Basker-3 well and closed up 1.5c at $1.265.
Origin Energy slipped 8c to $7.40. Origin said after the market had closed that the capital cost of the BassGas joint venture project, off the cost of Victoria, had blown out by $275 million to $750 million.
Clough, one of the contractors and in dispute with the Origin joint venture, was up 1.5c at 38.5c
The cost of the project, which began in April 2003, was originally pegged at $450 million.
In retail, Coles Myer dropped 10c to $11.70, while Woolworths fell 35c to $19.95.
Clothing retailer Colorado rose 1c to $4.23 after appointing Mel Sutton, an executive at Foster's Group, as its new chief executive and rejigging its senior management team.
SFE Corp shareholders have approved a merger with Australian Stock Exchange to create a $5.3 billion listed exchange. Shares in SFE fell 7c to $16.74 while ASX added 4c to $33.05.
Telstra rose 2c to $3.75 and Optus owner Singapore Telecom was steady at $2.15.
In the gold sector, Newmont rose 29c to $7.54, Newcrest rallied 45c to $21.75 and Lihir rose 7c to $3.02.
The top traded stock was gold and metals explorer Sundance Resources, with 29.2 million shares worth $2.7 million changing hands. Sundance ended the day up 1.9c at 10c.

Share buyers lose interest late in day

The sharemarket edged slightly higher yesterday, ahead of a US public holiday and an announcement on Australian interest rates today.

The ASX200 index gained 12.5 points, or 0.25 per cent, to 5104.7, while the All Ordinaries closed up 10.8 at 5060.7.

On the Sydney Futures Exchange, the September share price index contract closed day trading five points higher at 5102, on a volume of 12,283.

Man Financial broker Peter Oxlade said the market had started strongly after a boost from Wall St on Monday but fell back later in the day.

"Probably because of the US [Independence Day] holiday and everyone is just tidying up their books before the break," Mr Oxlade said.

"We get an announcement on Australian interest rates … there is certainly talk around the market of a potential rise but I think it is probably not the favoured scenario."

The Reserve Bank of Australia held its monthly board meeting on monetary policy yesterday and will make its decision public this morning.

The majority of economists expect the central bank to leave rates unchanged at 5.75 per cent.

The big oil and resources stocks were stronger yesterday, led by Woodside Petroleum, which rose 39c to $45.17, and Rio Tinto which was up 27c at $78.27.

Other oilies were mixed, with Santos up 19c to $12.35, Oil Search down 11c to $4.11 and Hardman up 4.5c at $1.805. Beach Pet was up 3.5c to $1.55.

Mining giant BHP Billiton fell 8c to $29.19 and industrial conglomerate Wesfarmers gained 38c to $36.06.

The big banks were mixed, with National Australia Bank rising 22c to $35.73 and the Commonwealth jumping 9c to $44.85, but ANZ shed 5c to $26.64 and Westpac slid 13c to $23.15. Investment bank Macquarie fell 64c to $69.00. Rival Babcock & Brown was up 1c at $21.58.

Goldminers were also varied, with Newcrest up 13c to $21.30, Newmont 8c stronger at $7.25 and Lihir down 6c to $2.95.

Anglogold Ashanti was one of the big movers during the session, rising 32c to $13.00.

Bendigo Mining was 1c lighter at $1.675 and Emperor continued to lag, losing a ha'penny to close at 39.5c.

Gold finished trading in Sydney at $US623.00 per fine ounce, up $US2.70 from yesterday's local close.

Shares in women's clothing retailer Noni B surged 37c, or 10.2 per cent, to $4.00 after it forecast a 20 to 25 per cent increase in net profit for financial year 2006.

Shares rise a tad as gold and crude rally

After dipping into negative territory around midday yesterday, the stockmarket had nudged ahead by the close as gains in precious metals and oil got the better of the weak lead from Wall Street on Friday.
The ASX 200 index added 18.32 points to close at 5092.2 while the All Ordinaries was up 15.9 to 5049.9.
Patersons Securities' associate director, Michael Brindal, said the market had benefited from strength in the gold price, which he said was boosted by positive US inflation figures.
"There was some inflation data that came out of the US on Friday that was relatively benign, so that's helped spark today's gold rush," he said. "That came on the back of a rate hike the night before and the commentary associated with that - that really sort of soothed the market in terms of interest rate outlook and now that's spilled right through into the gold price."
The big goldminers all finished ahead, with Lihir Gold up 13c to $3.01, Newcrest up 9c to $21.17 and Newmont up 12c to $7.17. The Sydney spot gold mid-point was $US620.30, up $US20.30 on Friday's close.
BHP Billiton gained 27c to $29.27 and Rio Tinto rose 20c to $78. Woodside Petroleum gained 78c to $44.78, Santos rose 6c to $12.16 and Oil Search lifted 12c to $4.22.
Caltex Australia put on 14c to $23.74 after it forecast a first-half net profit between $160 million and $170 million, after excluding the effect of volatile fuel prices.
Commonwealth Bank picked up 35c to $44.76, NAB rose 35c to $35.51, ANZ climbed 10c to $26.69 and Westpac was steady at $23.28.
Adsteam shot up 54c or 26.6 per cent to $2.57 after the tugboat operator received a $693 million friendly takeover bid from the world's biggest ship owner, AP Moller-Maersk.
Packaging maker Amcor lifted 12c to $6.80 after it said it had agreed to acquire a 16.67 per cent stake in K Laser China for $US10 million ($13.49 million).
Takeover target UNiTAB maintained its support for a merger with Tattersall's after an independent expert concluded that a $1.9 billion takeover offer from Tabcorp was not fair, although reasonable. Shares in Tabcorp lost 3c to $15.17, UNiTAB gained 3c to $14.79 and Tattersall's lost 3c to $2.79.
Promina fell 8c to $5.54 as the insurer announced the sale of Vero Lenders Mortgage Insurance to Genworth Financial Mortgage Insurance for about $220 million.
Insurance Australia Group rose 5c to $5.40 after announcing its bid to buy a 24.9 per cent stake in China's second largest insurer had progressed to the regulatory review stage.
AMP was up 12c to $9.25 and QBE was up 33c to $20.83.
Multiplex was up 1c to $3.28 after the construction group announced further possible delays to the expected completion date of its Wembley Stadium project, already way behind schedule.
Biota rose 13.5c to $1.345 after announcing the US Government intended to order another 12.3 million courses of its influenza drug, Relenza.
Telstra fell 1c to $3.67.
Ten Network fell 1c to $2.63 after it said it expected to grow its digital capabilities.