Australian shares had regained all of yesterday’s losses plus more to be 0.8% higher by midday. Once again resource stocks led the rally, while banks recovered some of their recent losses.

In the aftermath of yesterday’s release of the RBA’s minutes from the meeting earlier this month, economists are expecting a number of interest rate hikes over the next six to 12 months, including another 25 basis point rise in December as the RBA indicated.

In economic news, the latest Westpac-Melbourne Institute survey revealed the economy was rebounding faster than any time since the 1970’s. The release of the leading index of economic indicators showed growth of 5.8% in September, up from 3.8% in August and above the longer-term trend of 3.1%.

At noon, the All Ords had gained 40.8 to 4,791.0, while the ASX/200 added 43.6 to 4,773.0. About 1.1 billion shares worth around $1.9 billion had changed hands. 

Materials and Resources rose 1.5% as base metals prices finished within 0.7% either side of the gain on the London Metals Exchange overnight.

A report by Deutsche Bank suggesting a decline in imports by China would send copper prices falling in the first half of 2010 had little impact on the market.

Rio Tinto continued its rally to be 87c higher at $74.27. The company’s shares have gained 7% so far this week.

Larger rival BHP Billiton put on 73c, or 1.8% to $41.23.

The proposed merger between BHP and Rio’s Pilbara iron ore assets has come under fire from European steel makers.

Gold miners continued to benefit from the price of the precious metal reaching record highs. Lihir jumped 3.5% to $3.59, while Newcrest gained 2.6% to $36.15.

Chemicals and explosives companies Incitec Pivot and Orica advanced 2.9% and 2.8% to $2.84 and $25.37 respectively.

Macarthur Coal fell 38c, or 3.7% to $9.80 after the company forecast a profit for the six months to 31 December 2009 to be in the range of $30 million to $38 million, well below the $107 million profit posted the previous corresponding period.

It was a mixed morning for Energy stocks as the sector edged 0.3% higher. Strong demand for heating oil futures sent the price of crude higher.

Woodside added 56c to $50.16 and Oil Search put on 6c to $5.90.

Aquila surged 4.9% to $9.18. The iron ore and coal explorer was trading around $2.00 in early March this year.

Santos and Origin weakened 0.9% and 0.8% to $15.10 and $16.45.

Banks and Financials put on 1% due largely to a rally among insurers. QBE climbed 58c to $23.02, while IAG rose 8c to $4.00.

The big four banks were all above the gain line, with NAB the best performer, up 33c, or 1.2% to $28.83.

Investment bank Macquarie Group gained 1.1% to $49.25.

A broker upgrade saw GPT add 2.3% to 65.5c as the Property Trusts advanced 1.2%.

Westfield rose 25c, or 2% to $12.47.

Consumer Staples put on 0.8% in a steady morning for the sector.

Foster’s added the most points to the index, rallying 1.8% to $5.64, while Wesfarmers and Woolworths were both 0.4% higher at $29.45 and $28.52 respectively.

AWB added 2.5c to $1.285 after announcing this morning a $250.8 million loss for the year ended 30 September 2009 after posting a $60.3 million profit a year earlier. The loss was attributed to impairments.

The Consumer Discretionary sector was 0.6% higher due largely to a 19c, or 2.4% gain to $8.24 from gamer Crown.

Seven Network added 7c to $6.64 and Ten Network dipped 3c to $1.545 as reports surfaced the two television broadcasters have negotiated advertising rate increases for next year with media agency groups.

APN New & Media climbed 3% to $2.44 and Sky Network dropped 3.3% to $3.82 to be the major movers.

A mixed day among Industrial stocks resulted in the sector edging 0.2% higher.

Leighton put on 45c to $37.44 and Brambles shed 11c to $6.77.

UGL was flat as the company announced it had been awarded a $108 million supply and maintenance contract for Xstrata Coal.

The Healthcare sector was 0.1% lower to be only sector in the red. CSL dipped 24c to $31.86, while price target upgrades from Citi for both Ramsay Health Care and Healthscope had the opposite effect.

Ramsay put on 1.7% to $11.11, while Healthscope dropped 2.3% to $4.75.

Telstra gained 2c to $3.32, sending the Telecommunications sector 0.9% higher.

Around the region, the Nikkei 225 rose 29.3 to 9,759.2, while the Straits Times Index added 8.1 to be at 2,773.1. Across the Tasman, the NZSE50 lost 6.0 to 3,125.5.

Spot gold was trading at US$1140.85 per ounce, and the Aussie was buying US$0.9304. 

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AWB posts loss due to impairments
AWB reported a net loss after tax and significant items of $250.8 million for the year ended 30 September 2009, down on a $60.3 million profit reported a year earlier. The agribusiness said the result took into account two discontinuing businesses, significant goodwill impairment for Landmark Financial Services, a write down in Hi-Fert, and other significant items in relation to restructuring and legal costs.

At lunch, AWB shares were trading up 2c to $1.28.

Aussie economic recovery 'extraordinary'
The latest Westpac-Melbourne Institute survey revealed the economy was rebounding faster than any time since the 1970’s after the release of the leading index of economic indicators showed growth of 5.8% in September, up from 3.8% in August and above the longer-term trend of 3.1%.

UGL secures $108 million rail contract
UGL said it had been awarded a $108 million contract for the supply and maintenance of 10 railway locomotives for Xstrata Coal. The contract also includes the maintenance of 300 wagons for the next 10 years.

Half way through the day, UGL shares were trading up 2c at $13.78.

Macarthur Coal profit to be $30m - $38m
Macarthur Coal said that its forecast profit for the six months to 31 December 2009 was likely to be in the range of $30 million to $38 million. In the previous corresponding period Macarthur Coal posted a profit nearly $107 million.

By lunchtime, Macarthur Coal shares were down 46c to $9.72.