Australian shares rose more than one per cent after US data topped market expectations and a debt deal from Europe boosted hopes for the global economy.
European leaders on Friday agreed to enforce tighter budget rules for countries in the 17-nation bloc and pledged to pump 200 billion euros ($A263.28 billion) into the International Monetary Fund’s war chest.
The move heartened markets across Asia and brokers said Europe and the US looked set to follow suit in the days ahead.
“I think there’s an increased understanding from both an European Central Bank and political standpoint that they’ve all got to work together,” said RBS Morgan’s director of equities Bill Chatterton.
In the US, the Thomson Reuters/University of Michigan preliminary index showed consumer confidence climbed to a six-month high, giving shares a boost.
“It seems the US economy can perform quite well even when there are severe problems coming out of Europe,” said chief investment officer at Platypus Asset Management, Don Williams.
At the close on Monday, the benchmark S&P/ASX200 index was up 49.8 points, or 1.2 per cent, at 4,252.8, while the broader All Ordinaries index was up 47.3 points, or 1.1 per cent, at 4,311.4.
On the ASX 24, the December share price index futures contract was up 71 points at 4,260, with 67,536 contracts traded.
On the domestic front, Australia’s trade surplus narrowed to a three-month low of $1.6 billion in October as a slowdown in global economic growth trimmed exports from the resources sector, according to data from the Australian Bureau of Statistics.
All sectors except consumer staples were stronger, led by energy, health and materials.
Dealers said that political unrest in major oil producer Russia, where allegations of widespread corruption in the latest polls have sparked the biggest anti-government protests in a decade, could give energy stocks a boost in the near-term.
Origin Energy stocks ended up 43 cents, or three per cent, at $14.72 after China Petrochemical Corp (Sinopec) increased its stake in Origin Energy and US giant ConocoPhillips’ Australia Pacific liquefied natural gas (LNG) project to 25 per cent.
Woodside Petroleum gained 48 cents, or 1.5 per cent, to $32.37, Santos added 3.2 per cent and Aurora Oil and Gas rose 4.1 per cent.
BHP Billiton was up 67 cents, or 1.9 per cent, at $36.53, while Rio Tinto rose 39 cents, or 0.6 per cent, to $64.13.
The big four banks ended up, with Commonwealth Bank of Australia leading the gains with a two per cent rise to $49.83.
Qantas Airways finished slightly lower at $1.585 after the airline said it was continuing with plans to establish a premium Asian airline despite its own gloomy outlook for the global economy.
Shares in Silver Lake Resources fell 7 per cent after results from its latest drilling campaign disappointed the market.
Market turnover was 1.74 billion shares worth $3.74 billion, well below the recent average, as about six shares rose for every one that fell.
The gold price finished the local session at $US1,708.80 a fine ounce, down $US1.45 from $US1,710.25 on Friday.
