Australian shares closed up 1.7 percent on Monday, as solid gains from financial stocks buoyed by a positive lead from Wall Street pushed the market higher, dealers said. The benchmark S&P/ASX 200 index rose 83.5 points to 5,014.9 while the broader All Ordinaries gained 79.9 points to close at 5,090.1.
Some 1.14 billion shares worth 4.79 billion Australian dollars (4.1 billion US) changed hands, with 594 stocks closing the day higher, 433 lower and 302 unchanged. Dealers said financial stocks made gains after US stocks closed higher Friday amid market speculation that struggling investment bank Lehman Brothers could be taken over or win a sizeable cash infusion.
"That had a knock-on effect on Australian banks and the finance companies made good gains," IG Markets institutional dealer Chris Weston said. The four big banks were higher - ANZ gained 1.5 percent to 15.91 dollars, National Australia Bank added 2.3 percent to 24.09, Commonwealth Bank rose 3.1 percent to 42.65 and Westpac added 4.5 percent to 22.98. Resources suffered after commodity prices fell ahead of the weekend.
Market heavyweight BHP Billiton slipped 0.4 percent to 40.00 while leading energy producer Woodside Petroleum dropped 0.6 percent to 56.64. Mining giant Rio Tinto, the subject of a proposed BHP Billiton take-over, closed up 1.1 percent at 122.30. The stock hit a three-week high of 124.64 after the Australian government approved Chinalco's application to buy up to 14.99 percent of the London-listed arm of the group.