After a tentative start to the day the local market shot up upon the announcement of another drop in the nation’s unemployment rate. Most sectors remained close to the gain line, with rallies among the banks pulling the market into the black.

In late morning news, Australia’s unemployment rate dropped 0.1% to 5.7% in November according to the Australian Bureau of Statistics.

Meanwhile, the Melbourne Institute survey of consumer inflationary expectations increased 0.4% to 3.6% in December. Expectations decreased 0.3% in November.

At midday, the All Ords added 7.5 to 4,660.1, while the ASX/200 put on 8.4 to 4,646.3. About 1 billion shares worth around $1.8 billion had changed hands.

The big four banks added the most point to the index, leading the Banks and Financials sector to a 0.4% rise.

ANZ, Westpac and NAB were up between 1.1% and 1.3%. CBA was flat.

Bank of Queensland said economic data is pointing to more conducive trading conditions for the in 2010 than the past 12 months. The bank said this, combined with the sustainable lower cost base it now has in place, can be leveraged to grow wealth. The company’s shares were down 2.3% at $11.22.

IAG was the best of the insurers, adding 5c to be trading at $3.82. Suncorp-Metway shed 9c to $8.63.

The Materials and Resources sector weakened 0.2%. It was a mixed session for metals prices overnight with copper, zinc and lead falling, while nickel and aluminium prices advanced.

BHP Billiton and Rio Tinto were both slightly lower at $40.40 and $70.65 respectively.

Fortescue rose 7c to $4.21, while building materials company Boral jumped 3.9% to $5.62.

Gold miners were flat after the price of the metal closed lower for the fourth consecutive day as hedge funds sold to exit positions and take home profits ahead of the year-end.

Energy stocks struggled as the price of crude continued to slide to eventually close just above the US$70 a barrel mark. Woodside edged 20c higher to $47.37, while Origin gained 19c, or 1.2% to $16.02 as the company announced it had successfully synchronised to the grid the first turbine at its Darling Downs Power Station.

The sector lost 0.2%.

Santos weakened 16c to $14.14 after the company’s CEO, David Knox, said yesterday that the company anticipates demand for LNG from Asia to increase more than seven-fold by 2025.

Caltex slid 9c to $8.55 as Credit Suisse downgraded its target price on the stock due to weak industry conditions.

Oil Search fell 11c, or 1.9% to $5.63.

Consumer Staples advanced 0.2% largely due to 1.7% and 0.6% gains from Coca-Cola Amatil and Woolworths. They were trading at $11.00 and $27.12 respectively.

Metcash dipped 4c to $4.36 after the company announced it had agreed to acquire a 50.1% stake in hardware chain Mitre 10 for around $55 million. Metcash also went ex-div today.

Goodman Fielder lost 2c to $1.59. The company announced that it has entered into an agreement to sell its Commercial division edible fats and oils operations to Cargill for $240 million.

Wesfarmers was relatively flat at $29.07.

The Consumer Discretionary sector was one of four to be down 0.2%.

Retailers Billabong and Harvey Norman shed 2.1% and 1.2% to $10.96 and $4.07.

Ten edged 1c lower to $1.53. The television network said it was seeing improvements in the Australian advertising market and was benefiting from a stronger 2009 ratings performance in negotiations with advertising groups for next year.

Newscorp slid 13c to $16.03, while rival media company Fairfax added 2.5c to $1.625.

Wotif.com put on 13c to $6.52.

Strong gains from several mid-capped Industrials stocks saw the sector advance 0.3%.

UGL put on 3.5% to $13.13 as the company reiterated its FY10 earnings guidance and appointed Robert Bonaccorso as its new chief financial officer.

Boart Longyear and Reece Australia rallied 4.5% and 3.4% to 34.5c and $22.50.

Alesco shed 2% to $4.40 after featuring heavily in broker reports this morning. The company received three price target downgrades, including a 20.5% drop from Citigroup. 

A 2c gain to $3.47 from Telstra led the Telecommunications sector to be the best performing sector, up 1%.

Around the region, the Nikkei 225 lost 7.9 to 9,996.8, while the Straits Times Index added 8.9 to 2,806.1. Meanwhile, the NZSE50 gained 6.4 to 3,134.0.

Spot gold was trading at US$1,134.02 per ounce, and the Aussie was buying US$0.9146.

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Metcash picks up 50% stake in Mitre 10
Metcash said it had agreed to take a 50.1% stake in hardware chain Mitre 10 for around $55 million, as Australia’s number three supermarket chain seeks to compete against Bunnings and Woolworths' new hardware venture.

At lunch, Metcash shares were trading down 4c to $4.36.

UGL appoints CFO and reiterates guidance
UGL announced the appointment of Robert Bonaccorso as its new Chief Financial Officer, effective immediately. The company also said it expects to maintain its previously stated earnings guidance for FY2010 with earnings significantly weighted to the second half of the year.

Half way through the day, UGL shares were trading up 39c to $13.08.

Ten aims for 30% market revenue
Ten Network Holdings chairman, Nick Falloon, said at its AGM that it was seeing improvements in the Australian advertising market and was benefiting from a stronger 2009 ratings performance in negotiations with advertising groups for next year.

At noon, Ten shares were flat at $1.54.

GFF to sell edible fats and oils operations
Goodman Fielder said it has entered into an agreement to sell its Commercial division edible fats and oils operations to Cargill for $240 million. The company said the sale price of the business, which processes edible fats and oils and supplies food manufacturers and wholesalers in Australia and New Zealand, was a significant premium to the carrying value of the business.

At lunchtime, Goodman Fielder shares were down 1.5c to $1.595.

Origin synchronises first turbine
Origin Energy said it had successfully synchronised to the grid the first turbine of its 630 megawatt (MW) Darling Downs combined cycle power station. The company said the first of three 120 MW gas turbines was synchronised yesterday as part of a commissioning phase which will extend over coming months.

By midday, Origin shares were up 22c to $16.05.