Australian stocks closed a touch firmer on Monday as strength in the mining sector helped underpin the market after an early rally failed to gain momentum.
Australia's benchmark S&P/ASX 200 index closed up 6.1 points, or 0.2 percent, at 3,401.5, trading in a relatively narrow range on reduced volume of A$1.6 billion ($1.1 billion) after a mixed lead from Wall Street.
Nervousness about the possibility of rising interest rates in the United States limited investor enthusiasm amid a lack of fresh economic data, analysts said.
"There is a lot of caution in our market," Intersuisse analyst Peter Arden said. "Really nothing has gone seriously wrong and, our market is not that far off its highs, but there is a sense that it is not going to get back there anytime soon." Higher London Metal Exchange prices helped resource stocks in both London and local trade with BHP Billiton adding 1.5 percent to A$11.95, while rival Rio Tinto added 1.6 percent to end at a five-week high of A$34.25,
London-listed miners also rallied on Friday after investment bank Merrill Lynch upgraded Rio's rating to "buy" from "neutral" and said the fundamental demand outlook remained strong.
Newspaper publisher John Fairfax upgraded its 2004 earnings forecast, driving its shares up 3.0 percent to A$3.41, its highest level in more than three weeks.
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