The Australian stock market has closed flat after an up and down Thursday where a rally in response to unexpectedly strong jobs data petered out in afternoon trade. The benchmark S&P/ASX200 index was up 4.5 points, or 0.1 per cent, at 4,691.3 points, while the broader All Ordinaries index had risen 8.2 points, or 0.17 per cent, to 4,746.2 points. On the Sydney Futures Exchange, the December share price index contract was six points higher at 4,705, with 24,237 contracts traded. The market opened about 0.3 per cent weaker, but surged into positive territory after the September labour force report greatly exceeded analyst expectations. Figures from the Australian Bureau of Statistics showed the nation added 49,500 jobs in September, well above market expectations of a 20,000 increase in total employment. The data also sent the Australian dollar above 98 US cents and near 27 year highs. But the rally on equity markets was not sustained, as stocks headed south approaching the close. Rises were strongest among resources stocks, as commodity prices continued to benefit from a weak US dollar. The energy and industrials sectors also had a good day. BHP Billiton closed up 42 cents, or 1.04 per cent, at $40.95, while rival Rio Tinto rose 55 cents, or 0.7 per cent, at $79.54. But these gains were offset by a weak day among the big retail banks, as well as healthcare and consumer stocks. CBA closed down 34 cents at $51.50, NAB ended four cents weaker at $25.84 and Westpac slipped 12 cents to $23.30. ANZ bucked the trend, however, rising seven cents to $24.14.

Making news on Thursday, private health insurer NIB said it hoped that members of takeover target GMHBA would pressure the GMHBA board to give more serious consideration to NIB's $140 million offer. NIB closed up one cent at $1.25. Lead and zinc miner Perilya said it has entered into a binding agreement with Canada's GlobeStar Mining as a precursor to a friendly $C184 million takeover bid. Perilya finished steady at 47 cents. The spot price of gold in Sydney was $1,354 per ounce, up $7.15 cents from Wednesday's local close of $1,346.85. Gold miner Newcrest Mining rose 31 cents to $42.32. Gold One International said it had received approval for a $US65 million loan facility from Absa Capital and BNP Paribas. The stock closed steady at 29 cents. The most traded stock by volume was Astro Resources, with 82.39 million securities changing hands for $591,108. Astro ended up two tenths of a cent, or 40 per cent, at 0.7 of a cent, after the company said it had been granted tenements for its North Doolgunna gold project. Preliminary market turnover was 2.46 billion securities worth $5.13 billion, with 618 stocks up, 467 down and 372 unchanged.

The Australian dollar surged to its highest level in 26 months on Thursday and sat just off its highest level since the currency was floated in 1983 as Australia's jobs market continued to surge in September. In the last month, Australia added 49,500 new jobs, well more than the 20,000 economists had forecast, with the unemployment rate holding steady at 5.1%. Australian bonds fell rapidly on the jobs report as it highlighted increasing pressure on the central bank to resume its tightening policy. After surprising economists with its decision to leave rates unchanged at 4.50% this week for the fifth consecutive month, the robust labor market means the Reserve Bank of Australia will likely have to move again soon in order to contain a surging economy on the back of a China driven mining boom. The Australian dollar had traded around $0.9765 just before the jobs report but surged to as high as $0.9848 in afternoon trading its highest level since reaching a post float high of $0.9850 on July 15, 2008. The Australian dollar was at $0.9839, up from $0.9714 late Wednesday. Against the Japanese yen, the Australian dollar was at 81.535, from 80.76.