Resources boost for market after slow start

The sharemarket overcame negative early trading to close higher yesterday, boosted by strength among mining and oil stocks.

For a second day in a row, the share price of the embattled investment firm Babcock & Brown fell dramatically.

And a profit warning from the television broadcaster Ten Network pulled back domestic media stocks.

At the close, the ASX 200 index was up 48.9 points, or 0.92 per cent, to 5378.1, while the broader All Ordinaries rose 46.4 points, or 0.85 per cent, to 5479.6.

On the Sydney Futures Exchange, the June share price index futures contract gained 47 points to 5385.

An ABN Amro Morgans private client adviser, Simon Ferguson, said the market looked fragile, even though it finished in positive territory.

"The only strength has been energy and resources stocks. Commodity prices were mixed last night, but it's still the sector that a lot of investors are still pinning hope on. There was a bit of support from the banks late in the day. But you would still have to say the market is quite fragile."

BHP Billiton rose $1.24 to $43.04 and Rio Tinto added $4.62 to $134.50. Oil and gas producer Woodside Petroleum was up $1.78 at $63, and Santos strengthened 32c to $22.

Among the banks, NAB moved up 64c to $28.28, Westpac rose 43c to $21.90, and ANZ gained 8c to $19.65. Commonwealth dipped 15c to $41.76.

Babcock & Brown fell $1.65, or 23.91 per cent, to $5.25 as investors continued to dump shares despite the investment house announcing it had sealed a $7.5 billion deal in Britain.

In media, Ten fell 20.5c to $1.76, as it downgraded the full-year earnings outlook for its core business and as declining spending on advertising threatened its bottom line. Consolidated Media fell 6c to $3.12, and Fairfax 8c to $3.01.

News Corp rose 47c to $19.20, while its non-voting stock gained 56c to $18.66.

On Wall Street on Thursday, the Dow Jones industrial average was up 57.81 points at 12,141.58.

Among local gold stocks, Newmont dipped 5c to $4.95, and Newcrest 21c to $26.77. Lihir added 5c to $2.91. The price of gold in Sydney was $US871.90 an ounce, up $US4.40 on Thursday's close.

Among retailers, Wesfarmers, which owns Coles, put on 68c to $38.77, and Woolworths 40c to $26.65.

Telstra was up 2c at $4.56, and Singapore Telecom, owner of Optus, held at $2.79.

Virgin Blue was up 0.5c to 56c as it announced $50 million in cost savings and cut capacity to help offset surging fuel prices.

The power retailer AGL Energy gained 30c to $14 as it opened its $236-million Hallet wind farm in South Australia.

The top-traded stock by volume was Jervois Mining, with 58.8 million shares worth $1.66 million changing hands. The shares gained 0.1c to 2.8c.

Preliminary national turnover was 1.91 billion shares worth $6.09 billion, with 526 stocks up, 731 down and 356 unchanged.