The Australian share market ended its recent losing streak with firm gains on Monday as hopes mounted that European leaders were closer to finding a solution to the region’s debt crisis.
Strong US Thanksgiving sales figures also boosted the local bourse.
However, IG Markets market strategist Stan Shamu warned that it could just be a relief rally in what will prove to be a prolonged bear market.
After hitting a seven-week low on Friday, the benchmark S&P/ASX200 index rebounded to close up 73.9 points, or 1.85 per cent, at 4,058.2.
The broader All Ordinaries index was up 68.2 points, or 1.68 per cent, at 4,125.8.
On the ASX 24 at 1621 AEDT, the December share price index futures contract was 67 points higher at 4,070, with 33,313 contracts traded.
Mr Shamu said a report in Italian publication La Stampa suggesting that the International Monetary Fund (IMF) could offer Italy financial aid had boosted investor sentiment, although some analysts said the fund simply did not have such resources.
US Thanksgiving sales topped estimates, marking a strong start to the holiday season for the debt-laden superpower’s retail sector, and boosting Australian and Asian markets, as well as US and European futures.
“The financial and materials heavyweights are leading the charge higher,” Mr Shamu said.
“However, volume remains thin, suggesting some investors are wary of the potential for the European debt crisis to eclipse strong US Thanksgiving sales this week.”
Markets weren’t giving European leaders time for austerity measures to work, so some traders would seek to sell into the current rally early in the week, Mr Shamu said.
National Australia Bank was the strongest of the major banks, up 92 cents, or 4.22 per cent, at $22.74.
Westpac jumped 76 cents, or 3.9 per cent, to $20.26, Commonwealth Bank added $1.50, or 3.3 per cent, to $46.89, and ANZ put on 43 cents, or 2.29 per cent, to $19.20.
In the industrial space, Transurban Group found 15 cents, or 2.82 per cent, to $5.47, while Brambles gained 13 cents, or 1.94 per cent, to $6.84.
In the headlines on Monday, national airline Qantas has forecast a fall in first half underlying profit of up to 66 per cent because of higher fuel costs and the impact of industrial disputes.
Qantas finished up five cents, or 3.44 per cent, at $1.505.
Rio Tinto said market sentiment had worsened in recent months because of Europe’s debt woes and economic weakness in the US.
Rio Tinto advanced $1.32, or 2.13 per cent, to $63.27.
BHP Billiton has promoted the head of its diamond division Graham Kerr to be chief financial officer, replacing Alex Vanselow.
During a teleconference, BHP Billiton chief executive Marius Kloppers said the European debt crisis was hampering trade finance.
BHP Billiton climbed 80 cents, or 2.35 per cent, to $34.85.
Rare earths miner Lynas Corporation was the best performing stock on the S&P/ASX 50 index, up 6.82 per cent at $1.175, while the worst performer on this index was Woodside Petroleum, following its downgrade of 2012 oil and gas production targets on Friday.
Woodside fell 76 cents, or 2.28 per cent, to $32.60.
The spot gold price in Sydney at 1626 AEDT was $US1,705.80 per fine ounce, up $US19.47 from $US1,686.33 on Friday.
Gold miner Newcrest appreciated $1.08, or 3.23 per cent, to $34.50.
National turnover was 1.87 billion shares worth $4.02 billion, with 565 stocks up, 439 down and 350 steady.
AAP rlm
