Australian markets

The Australian share market closed higher for the second day in a row on Tuesday as the latest inflation figure came in lower than expected. The benchmark S&P/ASX200 index was up 21.8 points, or 0.46 per cent, at 4,807.8 points, and the broader All Ordinaries index had lifted 20.9 points, or 0.43 per cent, to 4,909.0 points.On the ASX 24, the March share price index futures contract was 17 points stronger at 4,787 points, with 24,869 contracts traded. The Australian Bureau of Statistics (ABS) said on Tuesday that the consumer price index (CPI) rose 0.4 per cent in the December quarter, the smallest quarterly rise since the March quarter of 2009, lowering the annual inflation rate to 2.7 per cent from 2.8 per cent. A CPI rise of 0.7 per cent had been expected for the December quarter.

In the retail sector, Woolworths improved 42 cents to $27.18, Myer firmed four cents to $3.69 and David Jones picked up one cent at $4.87. In the resources sector, global miner BHP Billiton was up 13 cents at $45.05, and Rio Tinto added 40 cents at $85.51. Oil Search dipped two cents to $6.75 despite saying its oil and gas production came in above guidance in 2010 at 7.66 million barrels of oil equivalent (mmboe), following a better-than-expected performance from fields in Papua New Guinea. In the banking sector, National Australia Bank was 17 cents higher at $24.78, Westpac rose two cents at $22.82, and ANZ fell five cents to $23.61.Commonwealth Bank gained 28 cents to $52.60, after announcing it had $199 billion in funds under administration at December 31, a two per cent rise in the December quarter.

Among other stocks, gold miner Newcrest advanced 59 cents to $37.62 as it knocked the top off its full-year gold production guidance, but reported better-than-expected output for the December quarter. Airline Virgin Blue shed one cent at 41.5 cents after it flagged a plunge in first half net profit due to floods, a slowdown in consumer spending and disruptions to the airline's check-in system last September. Property developer Mirvac Group eased three cents to $1.26 as it said it would take a $215 million provision against inventories on slow sales and property oversupply in regional markets. Household fixtures supplier GWA was five cents lower at $3.39 after it said underlying like-for-like sales in the first half of 2010/11 rose less than expected, due to poor weather, but trading earnings still were consistent with earlier guidance.

The top-traded stock by volume was Buccaneer Energy, with 155.15 million shares worth $14.2 million. Buccaneer was 2.9 cents higher at 10 cents after announcing that it had lifted its reserves estimate at its Southern Cross unit in Alaska by 82 per cent. Preliminary national turnover was 2.69 billion shares worth $4.52 billion, with 614 stocks up, 577 down and 365 unchanged.

The Australian dollar was higher late in Asia on Tuesday despite inflation data shocking on the downside, killing any lingering bets on a near-term rate hike. The Reserve Bank of Australia had already been tipped to stay on hold when it meets Tuesday but the weaker-than-expected quarterly inflation numbers led some analysts to forecast the bank may not hike at all in 2011. The Australian consumer price index rose 0.4% in the fourth quarter of 2010 from the third quarter and rose 2.7% from a year earlier, the Australian Bureau of Statistics said. Economists on average had expected the CPI rose 0.7% in the quarter. The year-on-year core inflation increase was the slowest since 2000. The Australian dollar immediately fell 30 points to a session low of $0.9928--but holding onto some of its gains from New York trading. The Australian dollar changed hands against the U.S. Dollar at $0.9957 up from $0.9880 late Monday. Against the Japanese yen, the unit traded at 82.095 from 81.69.