Stocks claw back

THE Australian market closed slightly higher today following overnight talks by European leaders to cut Greece’s debt and positive overseas leads.


The S&P/ASX 200 index closed 65.9 points higher at 4071.7, while the broader All Ordinaries closed 62.8 points higher at 4153.2.

Cameron Securities client adviser Adrian Leppinus reportedly told the Australian Associated Press trading volumes had dropped off significantly since a surge in value at the open, with little conviction among buyers.

"There's still not a lot of confidence in the market and people are still waiting for more clarity over what's happening in Europe before buying stocks," he said.

"Some sections of the market do look quite cheap but it doesn't look like there's going to be any quick fix solution [to the debt crisis]."

German Chancellor Angela Merkel and French President Nicolas Sarkozy reportedly spoke to Greek Prime Minister George Papandreou overnight.

It is understood that Merkel and Sarkozy told Papandreou that Greece would remain part of the eurozone, while Papandreou promised that Greece would cut its debt.

In today’s mining news, major miner Rio Tinto gained $A1.03 to $69.38 on the back of its announcement that it planned to invest a further $US833 million in infrastructure to boost its iron ore production in Western Australia's Pilbara region

Meanwhile, BHP Billiton was up 73c to $37.63, fellow iron ore miner Fortescue Metals Group remained unchanged at $5.88 and Atlas Iron added 20c to $3.66.

The best performer of the day, Sundance Resources, gained 13.1%, or 5c, to 43c, as reports in The Australian Financial Review’ Street Talk claim China’s government may tap Wuhan Iron and Steel Corporation to buy half of Sundance’s Mbalam project in Africa if Hanlong Mining Investment drops its bid for the company.

China’s foreign investment watchdog is likely to reconsider the company’s $1.4 billion bid for Sundance Resources after investigations began into alleged insider trading by three Hanlong executives.

Local gold producer Newcrest Mining closed 64c lower at $38.11, AngloGold Ashanti was down 10c at $8.74, Kingsgate Consolidated shed 30c to $7.83, while Medusa Mining was up 4c at $8.17.

Spot gold was trading at $US1813.15 per ounce in late afternoon trade.

Base metals on the London Metal Exchange regained ground during afternoon trade in Singapore.

Copper for three month delivery added 0.41% to $8665 per tonne, zinc was 0.79% higher at $2178/t, while nickel shed 0.4% to $21,290/t in late afternoon trade.

Finally, the Australian dollar was trading at $US1.02 at 4.17pm (AEST).