Resources climb on stronger metals

THE local market started strong today, hitting a 30-day high in early trade on better-than-expected jobs data, while stronger metal prices saw most miners finish in positive territory.

Kristie Batten

The Australian Bureau of Statistics’ monthly Labour Force report found the unemployment rate decreased 0.2% to 5.1% in August 2010, seasonally adjusted.

The statistics showed the number of people unemployed decreased by 22,500 people to 607,700 in August, while the number of full-time positions jumped by 53,100 people to 7.92 million people.

"An unemployment rate of 5.1 per cent means the economy is chugging along, so while companies have been pretty uncertain on outlook, strong domestic employment should be helpful," an unnamed trader told Dow Jones Newswires.

At 11:37am AEST the S&P-ASX 200 index hit a four-week high of 4593 points, while the All Ordinaries hit 4631.2 points.

Both indexes cooled later in the session, with the S&P-ASX 200 closing 1% or 45 points higher to 4582.2, while the All Ordinaries finished 0.9% or 43 points up to 4621.3.

Aside from Tokyo’s Nikkei, all overseas leads were positive with base metals pushing higher on the London Metal Exchange overnight.

Tin jumped 3.5% to $US21,641 per tonne, nickel gained 3.3% to $22,891/t and lead was up 2.3% to $2205.50/t.

The exception was aluminium, which dropped 0.3% to $2130.75/t.

BHP Billiton rose 0.7% or A27c to $38.18, as the miner announced it had ended talks with steelmaking giant ArcelorMittal over the possible combination of the two companies’ iron ore assets in Liberia and Guinea.

“The companies were unable to reach a commercial agreement,” BHP said in a short statement last night.

“BHP Billiton and ArcelorMittal will continue to advance their iron ore interests in West Africa independently and work closely with governments and their communities.”

Meanwhile, Rio Tinto closed 0.6% or 46c higher to $73.90.

The big news of the day is Avoca Resources’ joining with Toronto-listed Anatolia Minerals, which the companies described as a “merger of equals”

The deal will create a dual-listed company with a market capitalisation of around $US2 billion with producing gold mines in Australia and Turkey.

Despite the news, Avoca shares dropped 4% or A14c to $3.20.

The biggest mover among resource stocks today was Orion Metals, which soared 76% or 6.5c to 15c on the acquisition of the Killi Killi Hills prospect in Western Australia.