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Market Update

Australian Indexes Surge Above 5,000 on Commonwealth, Leighton Earnings

Author: Marcus Jacob
Last Update: 8:29 AM ET February 13 2013

6:30 PM Sydney Australian market indexes surged after Commonwealth Bank reported higher than expected profit and said it is on target to reach $7 billion for the year. Leighton swung to net profit and guided higher net in the current year. Stockton reported a loss.

Stocks gained and market indexes extended gains after Commonwealth Bank reported bumper profit.

The benchmark ASX 200 index increased above 5,000, first in three years and resource and bank sector stocks led the advance.

The ASX 200 index inched increased 44.70 or 0.9% to 5,003.70 and the broader All Ordinaries climbed 43.01 to 5,024.54.

The Australian dollar declined to $1.033 and rebounded from its 4-week low after the markets rallied.

Commonwealth Bank Earnings Surpass Expectations

Commonwealth Bank reported better-than-expected six months to December profit of $3.78 billion. Retail banking arm that included home loans delivered 13% increase in profit to $1.5 billion.

Net interest margins increased in the period but declined from a year ago and return on equity was unchanged at 18%.

The bank also confirmed that it is on target to deliver $7 billion profit for the year and the bank lifted its dividend by 20% to $1.64 a share.

Stock Movers

Bradken extended gains for the second day with a rise of 55 cents or 8.1% to $7.32 after the equipment maker said first half profit increased 9% to $46.7 million.

Whitehaven Coal increased 1 cent to $3.20 and Newcrest Mining slipped 27 cents to $23.40.

Oil Search Limited slid 3 cents to $7.47 and Santos Limited rose 1 cent to $12.16. Beach Energy closed unchanged at $1.40. AGL Energy decreased 21 cents to $15.24.

Woodside Petroleum jumped 26 cents to $35.97 and Origin Energy Limited slid 5 cents to $12.10.

Rio Tinto climbed $1.43 to $70.46 and BHP increased 33 cents to $37.92. Lend Lease gained 9 cents to $10.40.

Leighton soared 11.2% to $23.14 after it reported a full-year profit in 2012. The construction said it earned $450 million and reversed $285.5 million loss in 2011.

Leighton also guided net profit in the current year between $520 million and $600 million and said its joint venture with Al Habtoor Group is still struggling.

The company wrote down additional $82 million and increased its total exposure to $1.1 billion and the venture has refocused its efforts to Saudi Arabia and Qatar from Dubai.

Stockton reported a loss of $147 million in the six months to December and wrote down $306 million in assets in its non-core real estate business.

The home builder reported underlying profit excluding one-time charges declined 26% to $255 million or 11.6 cents a share.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc