Reuters: Hot Stocks: Australia shares gain 0.3 pct, led by resources

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Australia shares gain 0.3 pct, led by resources Dec 11th 2012, 00:19 Mon Dec 10, 2012 7:19pm EST (Adds comments, stocks on the move) MELBOURNE Dec 11 (Reuters) - Australian shares climbed 0.3 percent to a seven-week high on Tuesday, boosted by higher prices for base metals, gold and oil as well as hopes of 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 1.4 percent and 1.3 percent respectively as iron ore prices touched their highest since July. Analysts said there was room for further gains in the new year, with local equities still very cheap when compared with fixed interest markets. "If you want safety and certainty, you can get it but you are paying a huge price for it," said Peter Quinton, head of research at Bell Potter Securities. "You have to believe that yield differentials will be a key driver of the market in 2013," he said. The average dividend yield of the Australian sharemarket is 5.1 percent for 2013, well above the current 90-day bank bill rate of 3.3 percent and 10-year bond yield also at 3.3 percent. Quinton said 20 of Bell Potter's 26 favoured stocks offered dividend yields above 5.5 percent, including the top four banks, Westfield Retail Trust, wealth manager IOOF and retailer JB Hi-Fi Ltd. The benchmark S&P/ASX 200 index rose 14.5 points to 3,572.4 at 0008 GMT, its highest intraday level since Oct. 18. The benchmark has gained 12.4 percent for 2012. New Zealand's benchmark NZX 50 index reversed small early losses to be up 3.5 points to 4,034.3. STOCKS ON THE MOVE * Lend Lease shares rose 1.5 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. 0005 GMT * Shares in engineering firm Downer EDI rose 2.3 percent to A$3.55 after the company reached a negotiated settlement on a Singapore tunnel dispute and agreed to pay S$50 million. 0002 GMT * Lynas Corp shares were placed in a trading halt. The company was due to respond to comments that it must export waste material created by operations at its rare earths plant in Malaysia or risk having its operating licence revoked. (Reporting by Victoria Thieberger; Editing by Richard Pullin) Link this Share this Digg this Email Reprints

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