Reuters: Hot Stocks: Australia shares hit 17-month high, resources rally

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Australia shares hit 17-month high, resources rally Dec 12th 2012, 06:22 Wed Dec 12, 2012 1:22am EST (Adds details, comments) By Maggie Lu Yueyang CANBERRA, Dec 12 (Reuters) - Australian shares hit a near 17-month high on Wednesday, as stronger commodity prices boosted mining stocks and investors looked for a settlement of U.S. budget talks, ahead of a Federal Reserve policy statement later in the day. Big miners made gains as iron ore prices rose to their highest level since July, backed by buying from top importer China, while energy stocks also advanced on higher oil prices. , Investor sentiment turned positive after U.S. House of Representatives Speaker John Boehner said he remained hopeful about an agreement to tackle the fiscal crisis by the end-of-year deadline. "Definitely the momentum is to the upside," said Stan Shamu, a market analyst at IG Markets. "Everyone seems to be pricing in a fairly positive outcome to the fiscal cliff negotiations as well." The S&P/ASX 200 index inched up 0.2 percent, or 7.8 points, to 4,583.8, extending gains into a fourth straight session and marking its highest close since July 22, 2011. The benchmark climbed 0.4 percent on Tuesday. Top miner BHP Billiton Ltd climbed 1.0 percent after it said it would sell its interest in the Browse liquefied natural gas project to PetroChina Co Ltd for $1.63 billion. Rio Tinto Ltd gained 0.7 percent, and Fortescue Metals jumped 1.7 percent. Woodside Petroleum Ltd , the country's biggest energy producer, added 1.6 percent. The market gains came despite a pullback in Australian consumer confidence in December as households fretted about the outlook for the economy and finances. Analysts said this added to the case for further cuts in interest rates. "There is a view that the interest rate will be cut again next year, so that gives a fuel injection into the market," said Lonsec economist Michael Heffernan. Major banks all lost ground in afternoon trading, led by a 0.8 percent slide in Australia and New Zealand Banking Group . Linc Energy Ltd soared 25 percent, following a 15.5 percent surge on Tuesday. The company told the Australian Stock Exchange on Tuesday it had no explanation for the surge. Linc's share price has doubled since Nov 8, when Reuters reported that Russian billionaire Roman Abramovich was considering investing in the company. "There is some view that they might be able to sell some of their assets I think, because they've got a lot of underground coal assets around the world," Heffernan said. Miner Aquila Resources Ltd surged 12.7 percent after it said arbitration on a funding dispute with its partners on a A$7.4 billion ($7.7 billion) iron ore project in Western Australia would start in late February in 2013. Echo Entertainment Group Ltd jumped 4.3 percent after it appointed John Redmond as managing director and chief executive officer. He will start in January. Tourism operator Flight Center Ltd rose 4.3 percent, after it said it would slash debt by repaying a $60 million loan that was used to partly fund its 2008 acquisition of Liberty Travel in the U.S. Paints maker DuluxGroup Ltd rose 1.7 percent after it said it would compulsorily acquire the remaining shares in takeover target building products maker Alesco Corp Ltd . New Zealand's benchmark NZX 50 index was down 0.8 percent at 3,995.3. (Editing by Richard Pullin) Link this Share this Digg this Email Reprints

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