Australian shares closed up 1.1 percent on Thursday as investors snapped up leading energy stocks, although concerns about rising costs weighed on industrial counters, dealers said. The benchmark S&P/ASX 200 closed up 61.3 points at 5,709.4, while the broader All Ordinaries index rose 62.7 points to 5,817.2.
There were about 2.0 billion shares traded worth around 5.8 billion dollars (5.6 billion US dollars). Gainers outnumbered decliners 664 to 568 with 349 stocks unchanged. "There's still uncertainty all round because of rising interest rates and other cost increases so that's holding the overall market back, though there's still strength in the resources sector," said Ron Cameron, a portfolio manager at Ord Minnett. Cameron said higher oil prices combined with corporate deals to ignite interest in the energy sector.
The spotlight fell again on Origin Energy, the nation's second-largest retail energy group. The firm is one of the largest holders of coal seam gas reserves in Australia.
The stock remained suspended Thursday as investors pondered how much British energy giant BG Group would add to its initial 12.9-billion-dollar offer announced April 30. BG and Origin's board are understood to be close on agreeing on a sweetener to BG's starting offer of 14.70 per share.
BG's move has sparked interest in other coal seam gas players. The sector was also boosted by Santos' deal with Petronas, which will see the latter invest 2.5 billion dollars for a 40-percent stake in a liquefied natural gas project.
The plant on Australia's northeast coast will convert coal seam gas from Santos-owned fields in central Queensland into liquefied natural gas. Santos shot up 11.1 percent to close at a record 21.06. Queensland Gas jumped 8.7 percent to 2.37. Oil and gas sector leader Woodside rose 4.1 percent to 65.60. Miners BHP Billiton climbed two percent to 46.02 while Rio Tinto added 1.7 percent to 144.37 ahead of an investors' briefing in London. Fortescue Metals rose 3.0 percent to a record 10.63.