Australian shares gained more than one per cent as an upbeat start to the US earnings season and hopes of further monetary easing in China sparked a rally in global stocks.
At 1200 AEDT on Tuesday the benchmark S&P/ASX200 index was up 44 points, or 1.1 per cent, at 4,196.2, near it’s highest point since Dec 14.
The broader All Ordinaries index was up 44.2 points, also 1.1 per cent, at 4,250.8.
On the ASX 24, the March 2012 share price index futures contract was 50 points higher at 4,172, with 16,556 contracts traded.
Materials stocks led the market higher, adding 1.7 per cent as commodity prices rose overnight on the back of renewed optimism for global growth prospects.
BHP Billiton gained 1.6 per cent to $36.22 and Rio Tinto rose 1.7 per cent to $64.22.
Shares in African Iron jumped 35 per cent to 54 cents after South African mining company Exxaro announced plans to buy the Republic of Congo-focussed miner for $338 million.
The local market received a positive lead from Wall Street, which rose on the growing belief that the world’s largest economy is on the road to recovery.
“The current US reporting season will go some way to providing a snapshot of the health of corporate America, and by extension the US economy,” IG Markets’ Cameron Peacock said.
European markets also rose after news that ratings agency Fitch will likely not downgrade France, while a well received debt auction from Greece calmed immediate fears of contagion from the region’s debt crisis.
“It may not be until March, when the possibility of a hard default for Greece looms…that we really get to see to what degree, if at all, the US has broken free of Europe’s woes,” Mr Peacock said.
Gains also came on hopes that Beijing may soon move to support China’s slowing economy.
Commentators said data showing a market slowdown in Chinese trade in December was positive for commodity prices as Beijing was now more likely to take action to spur growth.
“While Chinese trade slowed considerably in December overall, the market took this as a positive for further policy easing – indeed, our China economists expect another RRR cut before Chinese New Year,” said ANZ Bank.
The big four banks pushed higher on the back of strong leads from their US counterparts.
Westpac led the pack, adding 2.3 per cent to $20.67.
News that Brambles, the world’s top pallet supplier, received first offers from private equity groups for its US document management business failed to boots its shares.
Brambles shares were down 0.3 per cent at $7.21.
