SYDNEY/WELLINGTON: Australian shares ended the first trading day of the new year on a solid note as mining stocks gained on strong iron ore and bullion prices, while a drastic drop in COVID-19 cases in the country's largest state also aided sentiment.

The benchmark S&P/ASX 200 index rose 1.5% to 6,684.20 points at the close of trade, marking its best day since Nov. 24.

Gold stocks led gains among the sub-sectors, rising over 5%, as bullion prices hit an eight-week high amid a spike in global COVID-19 cases and prospects of tougher coronavirus control measures.

Heavyweights Evolution Mining, Newcrest Mining and Northern Star Resources gained between 3% to 4%.

Miners notched up a 2.7% climb, as iron ore prices extended their bull run into the new year, jumping more than 3% buoyed by tight supply and robust demand.

Fortescue Metals Group gained 4.8% to hit a fresh record high, while Rio Tinto added as much as 1.3%.

Investor sentiment also received a boost after Australia's most populous state New South Wales on Monday reported zero local coronavirus cases for the first time in nearly three weeks.

However, shares of business support services provider Link Administration plunged about 14% after US-based SS&C Technology Holdings shelved its A$3.02 billion ($2.32 billion) buyout offer. New Zealand markets were closed for a public holiday.