Renewed demand for banking stocks has driven the overall Australian share market higher.
Options Xpress market analyst Ben Le Brun said banking stocks sparked a terrific turnaround during the day, pushing the local market higher after losses earlier in the session.
“It looks like bargain hunters and traders are ready to take a position prior to the Fed’s meeting,” Mr Le Brun said.
Local investors are nervous ahead of the US Federal Reserve’s policy board meeting on Wednesday, amid speculation the Fed will soon wind back its third round of bond purchases, known as quantitative easing.
“Some traders are starting to question if and when that’s going to happen,” Mr Le Brun said.
“It might not be on the agenda for at least a couple more months and that’s going to be very positive for risk assets across the board.”
Still, investor appetite for higher-yielding banking and telco stocks has continued, and mining shares were sold off amid concerns about demand in China.
In the banking sector, ANZ gained 63 cents, or 2.2 per cent, to $28.45, Westpac added 53 cents, or 1.8 per cent, to $29.47, Commonwealth Bank lifted $1.37 cents, or 2.04 per cent, to $68.47 and National Australia Bank was up 54 cents, or 1.8 per cent, to $29.92.
Among the miners, Rio Tinto dropped 33 cents to $53.65 and BHP Billiton lost 11 cents to $32.80.
Fortescue Metals Group fell nine cents, or 2.7 per cent, to $3.25.
Making news, construction giant Lend Lease announced it would merge its Australian construction and infrastructure businesses.
The company also said earnings from construction activities were down, and its shares dropped 70 cents, or 7.5 per cent, to $8.65.
KEY FACTS
* The benchmark S&P/ASX200 index was up 34.1 points, or 0.71 per cent, at 4,825.9.
* The broader All Ordinaries index was up 29.5 points, or 0.62 per cent, at 4,805.
* The June share price index futures contract was 48 points higher at 4,833, with 109,019 contracts traded.
* The spot price of gold in Sydney finished at $US1,387.10, up $US3.10 from Friday’s close at $US1,385.00
* National turnover was 1.5 billion securities worth $5.07 billion.
