Banking and mining good choices for investors

ANY doubt the mining and resources sector underwrote the resilient Australian economy last year - and filled the pockets of canny investors - was clearly put to rest yesterday when miners and explorers came home comfortably as the best performing stocks of 2010-11.

A steady flow of positive economic news during the financial year from the sector's biggest and rapacious customer, China, as well as rising commodity prices and a particularly strong first half ensured that mining companies were the best place to park your money over the last 12 months.

Nine of the top 10 biggest share price gains in the S&P/ASX 200 Index were mining or mining services companies with Bathurst Resources posting the biggest gain of a 585.6 per cent return for the just completed financial year.

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Bathurst benefited from the excitement around coal and is developing a high quality hard coking coal project at the Buller Coalfield in the South Island of New Zealand.

Odd man out in the top 10 was Mesoblast (2010-11 return of 367.57 per cent), a biotechnology company which has hit the headlines and sizzled the portfolios of investors with its adult stem-cell technology that promises to repair damaged heart muscles and combat other degenerative conditions.

At the most extreme end of the market, New Zealand coal miner Bathurst Resources were the top of the class - catapulted more than 500 per cent higher.

Other energy and resource companies in the top 10 ASX stocks for the year include Iluka Resources, Linc Energy, Regis Resources and Sundance Resources.

Banks were the second best performing sector on the ASX with growth of 3.9 per cent. The big four all climbed, including NAB (10.1 per cent), CBA (7.5 per cent), Westpac (4.9 per cent) and ANZ (1.8 per cent).

Commonwealth Bank chief economist Craig James said the All Ordinaries course over the year was best described as "two steps forward one step back", with its high point achieved in March after staging a recovery from the Japanese tsunami when it hit 5064.9.

Since then it has lost ground with fears of a double-dip recession in the US and Europe weighing on sentiment.

The biggest loser on the ASX this year was uranium miner Energy Resources which plummeted 69.10 per cent on the back of the Fukushima disaster.