Australian stocks higher at noon

THE Australian share market has extended its gains from early trade as investors return to equities on renewed optimism a solution is near at hand on the eurozone debt crisis. The local bourse opened more than one per cent higher today after Wall Street surged for its second straight day. By midday (AEDT) both major local indices had climbed higher, with the benchmark S&P/ASX200 index 113.7 points, or 2.9 per cent, better at 4040.2 and the broader All Ordinaries index up 110.8 points, or 2.78 per cent, at 4103.3. About nine shares had risen for every one that had fallen. CMC Markets chief market strategist Michael McCarthy said investors retained their optimism that European leaders were preparing a plan to prevent the eurozone debt crisis spreading overseas. "Quite clearly, the markets are much more comfortable with the European situation despite the fact we haven't seen concrete steps there ... and with pricing in such a bearish scenario anything mildly positive (can push the market significantly higher)," he said. Mr McCarthy said trading volumes were average, with a turnover of 895.29 million shares worth $2.12 billion. But, he said, there were more solid volumes in share futures as larger funds returned to equities. The December share price index futures contract was up 112 points at 4047 with about 28,296 contracts traded. "That's often a sign of institutional participation in the market. It's a very common tactic - they buy futures first and then rotate into stocks they actually favour," he said. Mr McCarthy said the energy and resource sectors had raced back from losses earlier this week as they were the most leveraged to global growth. Materials were the strongest performers on the market, benefiting from a rally on overseas metal markets on Wednesday, with copper rising in overnight trade for the first time in six sessions, supported by a weaker US dollar. Among the miners, BHP Billiton rose 2.6 per cent, or 92 cents, to $36.05, while fellow miner Rio Tinto gained 4.3 per cent, or $2.59, to $62.89. Atlas Iron rose 23 cents, or 8.2 per cent, to $3.03, while Fortescue Metals gained 31 cents, or 7.2 per cent, to $4.56. Energy stocks were also 3.6 per cent firmer after crude oil prices rallied yesterday in parallel with stocks on the back of a significant, unexpected drop in US oil stockpiles. Uranium miner Paladin Energy was the best performing stock on the S&P/ASX100 index, soaring 13.3 per cent, or 15.5 cents, to $1.33. There was also solid support for financials, with all the major retail bank stocks gaining more than three per cent. National Australia Bank was the strongest stock on the ASX 20, rising 4.6 per cent, or $1.01 to $22.79. The spot price of gold was $US1636.35, up $US12.60 from overnight's local close of $US1623.75. The worst performer of the top 100 companies on the ASX was electronic toll road company Transurban Group, which fell four cents, or 0.76 per cent, to $5.24.