Business Mortgage and Commercial Finance Brokers

18
Dec

Tue Dec 18, 2012 5:40am GMT

(Updates with comments, details)
    By Victoria Thieberger
    MELBOURNE, Dec 18 (Reuters) - Australian shares rallied 0.5
percent on Tuesday to a 17-month high, boosted by a rise in iron
ore prices, hopes for further rate cuts in 2013, and investor
optimism of a resolution to the U.S. "fiscal cliff" budget
talks.
    Top miners led the gains, with Rio Tinto up 1.9
percent, third-ranked iron ore miner Fortescue Metals Group
 up 2.9 percent, while mid-tier miners also benefited.
    The benchmark S&P/ASX 200 index advanced 21.8 points
to 4,595.2, the highest close since July 22, 2011.
    New Zealand's benchmark NZX 50 index closed 0.3
percent higher at 3,979.3.
    "The market is showing early signs of a 'fear of missing
out', as more cash is pushed into equities from the sidelines,"
said Ben Taylor, sales trader at CMC Markets.
    Taylor said the minutes of the Reserve Bank's Dec. 4 meeting
has also given investors reason to believe that further cuts in
interest rates will be seen next year to support the
underperforming sectors of the economy.
    Investors are factoring in a 60 percent chance of a quarter
point easing to 2.75 percent in February, when the central bank
next meets.
    Still, the Australian market is languishing 33 percent below
its all-time high, underperforming many regional peers as
investors have been fixated on European fiscal worries and the
slowdown in the U.S. economy.
    Among the mid-tier miners, Atlas Iron ended up 5.2
percent and Northern Iron up 7.6 percent after iron ore
prices hit the five-month high.
    Uranium miners rallied for a second session, boosted by  the
pro-nuclear  Liberal Democratic Party Japan's election
landslide. Paladin Energy jumped 12.4 percent to
A$1.08, helped by an upgrade from UBS analysts to buy, while ERA
Resources rose 7.3 percent to A$1.33.
    Toro Energy shares fell 4.4 percent when the
Western Australian state government delayed a decision on the
Wiluna uranium project until March.
    Top mortgage lender Commonwealth Bank of Australia
moved to expatend its hold on the mortgage market, taking
majority control of former independent lender Aussie Home Loans,
for an undisclosed sum. Its shares rose 0.3 percent to A$61.45.
    Qantas Airways gained 2.9 percent to A$1.435 on an
unsourced report in the Australian Financial Review that
Australia's competition regulator was looking favourably on
Qantas's planned alliance with Emirates. 

 (Editing by Eric Meijer)

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