The Australian share market has closed higher, boosted by a relief rally based on higher oil prices.
Oil prices suffered a sharp drop on Monday following the failure of oil-rich nations to agree on freezing production at a summit in Doha.
The rebound in oil prices on Tuesday was sparked by an oil workers’ strike in Kuwait, but some investors also believe that despite high global oil inventories and the failure of the Doha meeting, the longer-term outlook for oil is positive.
“For stocks that’s a bit of a confidence builder,” said CMC Markets chief market analyst Ric Spooner.
“It feeds directly in to the results of stocks like (miner and oil producer) BHP Billiton which has led us up today.”
“It also ameliorates some of the credit risks that banks may have with resources companies.”
Oil and gas producer Woodside Petroleum rose $1.04, or 4.03 per cent, to $26.82, and Santos lifted 20 cents, or 5.15 per cent, to $4.08.
In the resources sector, global miner BHP Billiton surged 97 cents, or 5.19 per cent, to $19.67, and Fortescue Metals jumped 21 cents, or 6.75 per cent, to $3.32.
Rio Tinto advanced $1.84 to $49.29 despite paring back its 2017 guidance for iron ore shipments by up to five per cent after facing delays in its driverless trains project in Western Australia.
Among the major banks, National Australia Bank was up 65 cents at $27.20, ANZ lifted 36 cents to $24.06, Commonwealth Bank firmed 52 cents to $74.70, and Westpac found 11 cents at $30.55.
Airline Qantas continued its descent, falling 15 cents, or 4.14 per cent, to $3.47 after unnerving investors on Monday with plans to cut flights.
KEY FACTS:
* At 1631 AEST, the benchmark S&P/ASX200 index was up 51.7 points, or 1.01 per cent, at 5,188.8 points.
* The broader All Ordinaries index was up 49.8 points, or 0.96 per cent, at 5,254.7 points.
* The June share price index futures contract was up 52 points at 5,181 points, with 35,393 contracts traded.
* National turnover was 4.1 billion securities traded, worth $6.5 billion.
