Mines, banks head Oz gains

The Australian stock market closed higher yesterday, lifted by hefty gains from the big miners and banks.

The benchmark S&P/ASX200 index was up 82.1 points, or 1.87 per cent, at 4462.4 points, while the broader All Ordinaries index rose 77.3 points, or 1.76 per cent, to 4477.3 points.

On the Sydney Futures Exchange, the September share price index contract was 80 points higher at 4439 points, with 25,812 contracts traded.

The market jumped out of the gates at the opening bell, climbing 1.5 per cent thanks to a bright finish on Wall St and firmer commodities prices during the offshore session.

The market held on to those early gains for most of the session, before closing on its highs for the day thanks to a late spurt just before the end of trade.

At the finish, about 11 stocks closed up for every five that ended down, with 19 among the S&P/ASX20 closing in positive territory and financial stocks the top six best performers.

Westpac was the biggest mover, climbing 3.23 per cent, or 72c, to A$22.98, while Commonwealth Bank was not far behind, up 3.12 per cent, or A$1.56, at A$51.49.

The lone stock in red figures in the S&P/ASX20 was CSR, down 4c at A$33.76.

The other retail banks also had a good day.

ANZ advanced 55c, or 2.47 per cent, to A$22.80 and NAB was up 40c, or 1.64 per cent, at A$24.80.

The head of dealing at City Index, Michael McCarthy, said the move higher was sparked by optimism about US corporate earnings results and higher commodities prices.

The big miners were well supported during the day, posting rises of more than 2 per cent and partially reversing the previous day's heavy selloff.

BHP Billiton rose 78c to A$38.40, while Rio Tinto finished up 83c at A$67.38.

Rio said in a review of second-quarter operations that growth was firmly back on its agenda and there was a range of expansion and investment options competing for capital.

Fortescue Metals was up 12c at A$4.38.

CMC Markets market analyst David Taylor said although investors were prepared to take on more risk, they remained cautious, highlighted by low volumes.

- AAP