KEY POINTS:
SYDNEY - The Australian stock market zoomed 3.5 per cent higher today to post its biggest single-day rise in almost four months as bargain hunters snapped up banks, property trusts and miners.
The benchmark S&P/ASX200 index smashed back through the psychological 5,000 point barrier, jumping 171.4 points, or 3.54 per cent, to 5,011.8.
The broader All Ordinaries rallied 160.1 points to 5,075.4, increasing the value of the market by about $39 billion.
At 1618 AEST, the September share price index futures contract was up 143 points to 4994 on volume of 26,976 contracts.
ABN Amro Morgans Brisbane director of equities Bill Chatterton said local investors were making up for a pretty ordinary day on Friday when local stocks fell over one per cent despite a strong US lead.
"Emotion can drive the market down and it gets too cheap," Mr Chatterton said.
"Then people realise we're Australia and not the US and our economy's in pretty good damn shape."
Austock Securities senior client adviser Michael Heffernan said bargain hunters were coming off the sidelines.
"All the dead dogs are getting to their feet," he said.
"Everyone's a lot happier today. The US had a run of three days of pretty good performances and the banks are just galloping.
Market leader BHP Billiton added $1.55, or 4.23 per cent, to $38.20 and Rio Tinto gained $2.99 to $118.49.
Fortescue Metals soared $1.01, or 12.44 per cent, to $9.13 after it trumpeted that it had reached the `project completion' stage at its Cloudbreak mine in Western Australia's Pilbara region.
Takeover target St George led the banks higher, putting on $1.29, or 4.91 per cent, to $27.55 as the company that wants to buy it, Westpac, surged 86 cents, or 4.26 per cent, to $21.06.
The other banks posted similar-sized gains, with Commonwealth Bank up $1.55 to $43.35, National Australia Bank up $1.31 to $28.32 and ANZ up 59 cents to $18.80.
Property trusts enjoyed some of the day's biggest gains, with Stockland leading the way with a 39 cent, or 8.55 per cent, gain to $4.95.
GPT firmed 12.5 cents, or 8.01 per cent, to $1.685 and Lend Lease advanced 65 cents to $9.40.
Investors may have also been heartened by a surprisingly lower increase in the producer price index (PPI), which raised the likelihood of an interest rate cut this year.
Retailers didn't miss out on today's rally, with Woolworths increasing by $1.12 to $26.36, Wesfarmers by $1.47 to $33.50, David Jones by 17 cents to $3.36 and Harvey Norman by 12 cents to $3.22.
Elsewhere in the resources sector, energy stocks rose led by Woodside with a 90 cent gain to $56.40.
At 1648 AEST, the spot price of gold was US$960.70, down US$1.00 on Friday's Sydney close.
Newcrest was one of the day's few losers, falling 80 cents to $31.41 as Lihir was steady at $3.02.
Qantas picked up 11 cents to $3.41 and Telstra made 12 cents to $4.36.
News Corp added 20 cents to $15.06 and its non-voting scrip added 20 cents to $14.86.
The top traded stock by volume was Sundance Resources with 88.29 million shares changing hands together worth $23.87 million.
Its shares added 9.5 cents to 31.5 cents.
Preliminary market turnover was 1.35 billion shares worth $4.81 billion with 649 rising, 459 falling and 311 unchanged.
- AAP
