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Australian equities rise: Afternoon market insights

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Australian equity markets rose today after positive leads from the northern hemisphere overnight. The Spanish government’s debt auction was a success, sending relief across world financial markets, while in Washington DC the IMF forecasted an increased global growth rate of 3.5%.

The S&P/ASX200 finished up 1.3%.

“The environment for equities is pretty good,” Donald Williams, chief investment officer at Platypus Asset Management in Sydney, which manages about $1 billion, told Bloomberg. “Even though 2012 is going to be a tough year because most of Europe will be in recession for a large part of this calendar year, you are still looking at a global growth rate of 3.5%, which is a pretty decent growth rate.”

All Australian industry sectors rose, with the minerals and mining, resources and gold gaining the most.

The S&P/ASX200 was up 1.33% to 4344.60. The All Ordinaries Index was up 1.25% to 4422.10.

The day’s winners

Energy Resources of Australia (ASX: ERA) was up 8.71% to $1.685 at 3pm. The rise follows a big jump yesterday and the day before as the uranium miner soars in value. Energy Resources is one of the largest uranium producers in the world. Its Ranger uranium mine is surrounded by Kakadu National Park in the Northern Territory, 230km east of Darwin. Rio Tinto owns about 68% of ERA.

Linc Energy (ASX: LNC) share price was up 7.24% to 1.185 at 2.45pm. It was down nearly 10% yesterday and had soared up by more than 37% the day before, after announcing it had formed a joint venture to produce gas in China. The Brisbane-based company is focused on producing underground coal gasification (UGC) and gas-to-liquids (GTL) technologies.

The day’s losers

Lynas Corporation (ASX: LYC) was down 1.57 % to $1.13 at 3.15pm. Lynas was up more than 6% yesterday. It is set to provide a new source of rare earths outside China when it comes online in the second quarter of 2012. It has a mine at Mount Weld, Western Australia — the richest known rare earth deposit outside China.

Adelaide Brighton (ASX: ABC) was down 1.34 % to $2.94 at 3.15pm. Adelaide Brighton focuses on construction, engineering, infrastructure and resource sectors in Australia. The Adelaide-based business reported record revenue and earnings in 2011.

Sector movers

The strongest sector was the S&P/ASX 200 Minerals and Mining (Sector), which was up 2.29% to 8794.60.

The weakest sector was the S&P/ASX 200 Utilities (Sector) index, which was up 0.06% to 4780.2 at 3pm.

Currency

The Australian dollar rose to buy $US1.0405 at 3pm.

Asia

Asian markets rose on positives leads from Europe and US and the successful Spanish bond auction overnight. South Korea’s Kospi Index rose 1%, while China’s Shanghai Composite Index gained 1.3%. The MSCI Asia Pacific Index gained 1.2% to 125.05.

Japan’s NIKKEI 225 was up a solid 2.06%, or 194.71 points, to 9659.42.

Hong Kong’s Hang Seng was up 1.23% or 253.04 points to 20815.30.

China’s dwelling prices fell in March in a record 37 of 70 cities as officials pledged to keep restrictions on property purchases, reducing buyer demand. The government is trying to deflate the bubble gradually rather than see the bubble burst as it did in most of the western world, with devastating economic damage.

The eastern city of Wenzhou led declines, with a 9% slump in values from a year earlier, while Beijing and Shanghai both had drops of 0.8%, according to data released by the Chinese government statistics bureau.

“The falling trend in prices reflects government policies, and these are unlikely to change this year, which is discouraging buyers,” Dariusz Kowalczyk, a Hong Kong-based strategist with Credit Agricole CIB, told Bloomberg. “The housing market is the main risk to China’s soft landing, one that we think will be controlled by the government but also one that needs to be closely watched.”

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