Market makes second day of strong gains

A rally in mining stocks has led the share market to its second straight day of strong gains.

The All Ordinaries closed up 25 points at 4,408, and the ASX 200 matched that gain adding just over 0.5 per cent to 4,386.

The market got off to a positive start after Wall Street closed firmer, following upbeat housing data and the belief legislators would reach an agreement to avoid the fiscal cliff.

Major miners BHP Billiton and Rio Tinto added more than 1 per cent, while some smaller operators saw gains of over 5 per cent during trade.

Rare earths miner Lynas ended 4 per cent higher after the company told shareholders it expects to start its processing plant in Malaysia next month, as environmentalists held campaigns outside its AGM against the plant.

Shares in uranium miner Paladin leapt 9 per cent.

The banking sector was a drag on the market.

Fortunes were mixed among the big four, with Westpac and NAB rising more than 1 per cent but ANZ and Commonwealth both falling close to 0.5 per cent.

The Reserve Bank released the minutes from its November board meeting, and most commentary was a repeat of the statement of monetary policy the bank released last week.

But one key line, that "further easing may be appropriate in the period ahead", has many economists saying the cash rate will be cut in December.

The market is now pricing a 60 per cent chance of a cut.

The Australian dollar could be set to join the big league, with the IMF considering classifying the Australian dollar as an official reserve currency.

The move is a sign of the dollar's rising importance and demand for it from foreign banks.

The Australian dollar had dipped following the release of the RBA's minutes but had since recovered.

Just before 5:30pm AEDT it was buying 104.05 US cents, 81.3 euro cents, 65.4 British pence and 84.6 Japanese yen.

West Texas crude continued to climb to $US89, while Tapis was up $3 a barrel to $US116.

Spot gold climbed to $US1,733 an ounce.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9327-0.0005-0.05%
    AUDUSD=X
    0.5555-0.0003-0.05%
    AUDGBP=X
    0.6753-0.0003-0.05%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg