Australian shares have closed significantly higher for a second straight day as investors grew more confident about China’s financial system.
A positive lead from Wall Street also helped local shares rise in value.
The market rose by just over 1.6 per cent, following on from a similar gain on Wednesday.
“Taking a positive queue from Wall Street and the soothing comments out of Beijing overnight, Aussie traders are refreshed and revived as we see a renewed interest for Australian equities,” CMC Markets trader Betty Lam said.
A reduction of first quarter economic growth estimates by the US Commerce Department was taken by Wall Street as a sign that the Federal Reserve would keep pumping money into the economy through its bond-buying program.
Fears of a credit crunch in China have also been allayed by moves from the country’s central bank to improve liquidity.
The major banks were strong performers on the Australian market, with ANZ up 67 cents at $28.51, Commonwealth Bank gained $1.87 to $69.16, NAB added 52 cents to $29.75 and Westpac was 57 cents higher at $28.81.
Other standouts included Qantas, which gained 5.5 cents to $1.345, Myer added 12 cents to $2.38 and Telstra was 13 cents higher at $4.78.
But the big miners lost ground, as key commodity prices dropped.
BHP Billiton fell 15 cents to $31.47 and Rio Tinto dropped 11 cents to $51.79.
IG market analyst Evan Lucas said the return of Kevin Rudd as Prime Minister, and the resignation of key government ministers, had little impact on the market.
KEY FACTS
* At the close on Thursday, the benchmark S&P/ASX200 index was up 79.6 points, or 1.68 per cent, at 4,811.3.
* The broader All Ordinaries index was up 77 points, or 1.64 per cent, at 4,784.8.
* The September share price index futures contract was 76 points higher at 4,780, with 33,106 contracts traded.
* National turnover was 1.8 billion securities worth $5.4 billion.
