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Market Wrap
Tuesday, 27 March 2012 11:50am
By AAP  |  In Economics

The Australian share market has followed offshore markets higher in opening trade, with investors encouraged by signs from US Federal Reserve chairman Ben Bernanke that the US would keep interest rates low.

At 1013 AEDT on Tuesday, the benchmark S&P/ASX200 index was up 37 points, or 0.87 per cent, at 4,299.8, while the broader All Ordinaries index was up 35.9 points, or 0.82 per cent, at 4,391.1.

On the ASX 24, the June share price index futures contract was up 40 points at 4,312, with 8,945 contracts traded.

The local market was buoyed by strong leads in offshore markets, with Wall Street's major indices rallying after Dr Bernanke signalled the US central bank is not willing to exit its easy monetary policy until its scheduled end date in late 2014.

In a speech on labour market issues, he said: "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand...a process that can be supported by continued accommodative policies."

The Dow Jones Industrial Average gained 160.9 points, or 1.23 per cent, to 13,242 points, while the broader Standard & Poor's jumped 19.4 points, or 1.39 per cent, to 1,416.5.

The tech-laden Nasdaq Composite advanced 54.65 points, or 1.78 per cent, to 3,122.6 points.

Dr Bernanke's speech linked support for risk assets overnight, Benny Sada, senior equities analyst with Australian Stock Report said.

"We saw a big rally in stocks and commodities and not surprisingly our materials sector is leading today's rally."

Commodities rallied overnight, with gold jumping 2.36 per cent, copper adding 1.85 per cent, and zinc up 0.75 per cent.

Oil also made gains, with US light crude oil advancing 0.54 per cent to $US107.15.

Materials stocks benefitted in opening trade, with market heavyweight BHP Billiton firming 38 cents, or 1.11 per cent, to $34.57 and Rio Tinto up 38 cents, or 0.6 per cent, to $64.13.

Oil stocks were led higher by Santos which gained 17 cents, or 1.19 per cent, to $14.40.

Australia's largest gold miner, Newcrest Mining, surged 68 cents, or 2.36 per cent, to $29.51, while copper and gold miner, PanAust Ltd, jumped 11 cents, or 3.67 per cent, to $3.11.

The spot price of gold in Sydney was trading at $US1,689.10 per fine ounce by 1028 AEDT, up $US24.90 from Monday's closing price of $US1,664.20.

Banks and financials made solid gains, with ANZ Banking Group leading the big four lenders higher after it gained 34 cents, or 1.49 per cent, to $23.15.

In news on Tuesday, agricultural chemicals supplier Nufarm posted a net profit of $18 million in the six months to January 31, up from $4.4 million a year earlier.

But the result did not meet market expectations, Mr Sada said.

Nufarm's stock sank 34 cents, or 6.67 per cent, to $4.76.

Market turnover reached 490.6 million securities, worth $679 million, with 463 stocks trading up, 196 down and 300 steady.

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