The Australian sharemarket rose to a 20-month high today as investors continued to buy banks, consumer staples, property trusts, healthcare and energy companies, while remaining hesitant on iron ore producers after spot iron ore prices continued to retreat.
The market was awaiting potential catalysts from the release of domestic employment data for December. Employment is expected to rise by about 5000 and the unemployment rate tipped to increase to 5.4 per cent from 5.2 per cent in November.
At 11.10am AEDT, the benchmark S&P/ASX 200 was up 0.4 per cent at 4756.1 after rising to 4756.4, its highest point since May 2011.
Commonwealth Bank of Australia, ANZ, Wesfarmers, Woolworths, CSL, Westfield Holdings, Santos and Oil Search rose 0.3-1.7 per cent, and Iluka jumped 6 per cent. Resources heavyweight BHP Billiton rose 0.3 per cent after an early fall, while Rio Tinto, Fortescue Metals and Atlas Iron fell 1.3-1.6 per cent after spot iron ore fell 4.9 per cent overnight.
"The market psychology is fairly cautious," said IG market strategist Stan Shamu. "It looks like investors have been getting out of growth stocks and back into the yield and defensive plays ahead of what might be a pretty uncertain few weeks for global markets."
After rising more than 9 per cent since mid-November, the market was vulnerable to a pullback before the domestic earnings period next month, Mr. Shamu said.
Iluka surged after reporting a 31 per cent fall in mineral sands production in 2012, providing some relief to investors who had feared a deeper fall.
Santos gained after its production rose 10 per cent in 2012 and 2013 guidance was maintained at 53-57 million barrels of oil equivalent.
Woodside Petroleum crept up 0.2 per cent after reporting a 31 per cent rise in its oil and natural gas output last year, as the performance of its flagship Pluto liquefied natural gas plant offshore Western Australia exceeded expectations since coming online in April. Annual output of 84.9 million barrels of oil equivalent was broadly in the middle of the guidance that Woodside--Australia's second-largest oil producer after BHP Billiton --made in October.
