Mining stocks have rallied, lifting the Australian share market after investment bank JP Morgan gave the sector a big confidence vote.

JP Morgan has raised its rating on the sector to “overweight” from “underweight” and has pointed to signs of a rebound in China’s economy, the world’s biggest metals consumer.

This and a strong rally in technology stocks that lifted US markets overnight had boosted the Australian share market ahead of the federal government’s budget release on Tuesday night, Lonsec general manager of equities research Bill Keenan said.

“Wall Street is positive at the moment, which has helped us,” he said.

“There’s been a rebound in resource stocks after JP Morgan upgraded the sector.”

Rio Tinto, which was named as JP Morgan’s top pick, had jumped $1.94 to $62.94.

BHP Billiton had lifted 92 cents to $38.08 and Fortescue Metals had risen 13.5 cents to $4.855.

Mining services and explosives business Orica dropped 92 cents to $21.02 after announcing that its half year profit had fallen.

Among the major banks, ANZ was 25.5 cents higher at $32.935, Commonwealth Bank was 61 cents better off at $79.99, Westpac had gained 27.5 cents to $35.175 and National Australia Bank had added 32 cents to $34.50.

Mr Keenan said investors were keenly awaiting the Abbott government’s first budget, due out on Tuesday night, however negative budget talk had already been priced into the market.

He said there was a chance the budget could be more positive than thought and lead to a rise in stocks.

KEY FACTS

* At 1032 AEST the benchmark S&P/ASX200 index was up 54.8 points, or 1.01 per cent, at 5,503.2.

* The broader All Ordinaries index was up 52.8 points, or 0.97 per cent, at 5,481.8.

* On the ASX 24, the June share price index futures contract was 60 points higher at 5,497, with 10,538 contracts traded.

* National turnover was 318.5 million securities worth $960 million.