Australian shares eke out second straight gain

The sharemarket has eked out a second straight gain as resources stocks offset a lacklustre session in other areas.

The Australian sharemarket has eked out a second straight gain as a year-long high in crude prices drove enough interest in resources companies to offset a lacklustre session from the big banks and defensive sectors.

At the end of trade, the benchmark S&P/ASX 200 index ticked up 4.4 points, or 0.08 per cent, to 5,479.8, while the broader All Ordinaries index added 6.7 points, or 0.12 per cent, to 5,562.2.

A solid open failed to translate into a closing gain of any significance for the second day, but CMC Markets chief market analyst Michael McCarthy said there were signs the local market could be in for an extended rally.

“The ASX200 index has broken the line in the sand,” he said.

“The index is now outside the sideways trading range that guided active investors over the previous financial year. On the face of it, this is pointing to higher levels for the sharemarket.

“While the index holds above 5,400 risks are on the upside.”

Mr McCarthy said a Santa Clause rally could push the benchmark to 5,900 points, provided Hillary Clinton wins the US presidential election and investors don’t panic over a likely US rate hike.

He added the focus was likely to remain on resources companies, which are enjoying a good run as commodity prices continue to rebound.

“Investors are chasing growth related stocks, while former favourites such as healthcare and property languish,” he said.

“The commodity cycle has turned ... Investors who are underweight miners, energy stocks, industrials and mining services still have value opportunities — but they won’t last forever.”

News of Russia potentially joining OPEC in curbing supply ensured a sea of green in the energy sector.

Santos surged 4 per cent to $3.94, Origin Energy bounded 4.1 per cent to $5.79, while Woodside added 0.7 per cent to $30.05.

Elsewhere, Oil Search rallied 3.4 per cent to $7.65 and Beach Energy climbed 2.8 per cent to 74.5c.

A rebound in oil prices extended to strength across the commodities space, with base metals surging offshore.

In materials, BHP Billiton leapt 1.7 per cent to an 11-month peak of $23.80, Rio Tinto advanced 2.1 per cent to an 11-month closing high of $53.20 and Fortescue jumped 3 per cent to $5.18.

Action in the finance sector was more subdued, with Westpac and ANZ off 0.4 per cent and 0.3 per cent, respectively, while Commonwealth Bank and NAB ended broadly steady.

Among other blue chips, Telstra slid 0.4 per cent to $5.05, while Qantas weakened 1.3 per cent to $3.14 on surging oil prices.

Elsewhere, UGL shares won 0.3 per cent amid hopes a rival bid could emerge to challenge a $524m play for control by CIMIC, while CSL lost 1.1 per cent as defensive stocks fell out of favour.

Meanwhile, the Australian dollar ended the local session at US75.5c, slumping half a cent on weak local housing data and strength in the US unit.