Reuters: Hot Stocks: Australia shares notch 7-week high as iron ore rallies

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Australia shares notch 7-week high as iron ore rallies Dec 11th 2012, 05:28 Tue Dec 11, 2012 12:28am EST (Updates with closing levels, comments) By Victoria Thieberger MELBOURNE Dec 11 (Reuters) - Australian shares climbed 0.4 percent to a seven-week high on Tuesday, elevated by higher commodities prices as investors bet on fresh economic stimulus from the U.S. Federal Reserve this week. The resource sector led gains, with top miners BHP Billiton and Rio Tinto advancing 1.3 percent and 0.8 percent respectively as iron ore prices jumped. "It seems the Christmas rally (in commodities prices) is about getting ahead of the FOMC meeting and staying ahead of any potential Chinese stimulus early next year," said Ben Taylor, sales trader at CMC Markets. The U.S. Federal Reserve holds a two-day policy meeting this week, and analysts expect it to announce monthly bond purchases of $45 billion, on top of the $40 billion in mortgage-backed security purchases it announced in September. Spot iron ore prices on Tuesday rose to their highest level since July, backed by buying from top importer China. That helped mid-tier iron ore miner Atlas Iron jump 9.8 percent to A$1.52. The benchmark S&P/ASX 200 index rose 18.1 points to 3,576, after an intraday high of 4,581 that matched the 15-month high hit on Oct. 18. But volumes were thinning heading into the Christmas break, with turnover at 80 percent of the 90-day average. The benchmark index has gained 12.4 percent for 2012. New Zealand's benchmark NZX 50 index lost 4.6 points to 4,026.2. Lend Lease shares rose 2.2 percent after the company said it was selected as preferred bidder for a A$1 billion revamp of Sydney's convention centre and entertainment centres. Shares in engineering firm Downer EDI jumped 5.2 percent to A$3.65 after the company reached a negotiated settlement on a Singapore tunnel dispute and agreed to pay S$50 million. Linc Energy told the Australian Stock Exchange in response to a query it had no explanation for the 17.5 percent surge in its shares on Tuesday. Linc said it has provided updates on its Carmichael coal project and clean energy technology in recent days. Investors shied away from recent strong gains for high-yielding stocks, sending telecoms firm Telstra Corp Ltd down 0.7 percent. It was the most actively traded stock. (Editing by Simon Cameron-Moore) Link this Share this Digg this Email Reprints

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