Stocks higher at noon on better sentiment

AUSTRALIAN shares were higher at noon, with investor sentiment still flowing from positive international economic news overnight.

AUSTRALIAN shares were higher at noon, with investor sentiment still flowing from positive international economic news overnight.

The local market opened almost one per cent up today on a strong lead from Wall Street, better-than-expected US company results and news that Slovakia would be the final eurozone country to vote in favour of an expanded European rescue fund.

By 12.04pm (AEDT), both major local indices had pared back some of their early gains, but remained in positive territory.

The benchmark S&P/ASX200 index had gained 22.2 points, or 0.53 per cent, at 4226.5 and the broader All Ordinaries index rose 23.5 points, or 0.55 per cent, to 4289.9.

Wealth Within analyst Janine Cox said local shares had gained nowhere near the levels of offshore markets overnight.

"I would look at the volatility of our market as being less than overseas markets at the moment, which is a good thing for investors," she said.

Ms Cox said the announcement that the carbon tax had been passed in the lower house and was expected to pass the Senate, had also given investors a bit more certainty after a lengthy political debate.

"Uncertainty tends to build when nobody knows whether something's going to happen or not, and now that it's actually going to be passed it's almost like the better the devil you know.

"(A media report today also said) the GST was likely to have three times the impact of the carbon tax on the standard of living for the average consumer."

Money continued to flow from typically defensive sectors such as consumer staples - which fell 0.7 per cent - to high growth sectors, including materials, which rose 1.5 per cent after copper surged to a two-week high overnight.

The metal went above $7,500 per tonne, as budding signs of increased Chinese purchases underpinned sentiment and drove prices further away from last week's 14-month low.

Mining giant BHP Billiton gained 45 cents, or 1.2 per cent, to $37.53, while fellow miner Rio Tinto rose $1.73, or 2.6 per cent, to $69.19.

Fortescue Metals Group also advanced, 17 cents, or 3.6 per cent, to $4.89.

Financials gained 0.18 per cent, as investors remained uncertain about Australian banks' exposure to the eurozone debt crisis.

All the major retail banks had shed value by noon except Commonwealth Bank, which gained 28 cents to $47.74. Westpac fell five cents to $21.58, ANZ lost 10 cents to $20.98, while National Australia Bank dropped 11 cents to $24.09/

The weakest stock of the top 100 companies on the ASX was Caltex, which fell 2.5 per cent, or 32.5 cents, to $12.86.

Meanwhile, making headlines in local trade, Qantas shares advanced half a cent to $1.56 despite the airline announcing it was grounding five planes and cutting up to 100 domestic flights because of ongoing industrial action.

It earlier said it expected at least 7000 of its passengers to be affected by strikes at airports across the country today.

Qantas baggage handlers and ground crew are holding rolling strikes throughout today, prompting the airline to cancel 14 domestic flights and delay another 38.

AMP Ltd rose 1.2 per cent, or five cents, to $4.16 after the bank said former Qantas chief financial officer (CFO) Colin Storrie had been appointed CFO of wealth manager AMP.

Mr Storrie will replace AMP's current CFO Paul Leaming, who will retire at the end of the year after almost 14 years with AMP.

The best performing stock on the ASX 100 was mineral sands producer Iluka Resources, which gained 5.8 per cent, or 90 cents, to $16.40, after it said it had increased September quarter production by almost 10 per cent and that the fundamentals of supply and demand remain solid.

The spot price of gold in Sydney was $US1682.3 per fine ounce, up $US15.40 an ounce from yesterday's close at $US1666.90.

Market turnover was 755.02 million shares worth $2.11 billion, with about six out of every 10 stocks on the ASX 100 rising.

The December share price index futures contract was up 34 points at 4248, with 11,723 contracts traded.