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SYDNEY - The Australian sharemarket closed four per cent higher, fuelled by interest rate cuts in the US and big gains in energy and resource stocks locally.
At the 1615 AEDT close, the benchmark S&P/ASX200 was up 155.5 points, or 4.04 per cent, at 4001.1, while the broader
All Ordinaries gained 151.5 points, or 3.98 per cent, to 3957.3.
On the Sydney Futures Exchange, the December share price index futures contract was 196 points higher at 4,044 on a volume of 39,513 contracts.
ABN Amro Morgans private client adviser Bill Bishop said investors had not seen such a positive day on the local market for some time.
"There is life in the old dog yet, we were getting a bit worried that the resuscitations weren't working," he said.
Mr Bishop said higher overnight oil and commodities prices gave the local market a boost, in addition to the US Federal Reserve's half a percentage point interest rate cut.
"You'd have to say the American interest rate fall of half a per cent had some sort of effect.
"But the big thing was the rise in commodities' prices overnight for the resource and energy stocks."
Mr Bishop said while the gain made by the market today was pleasing, he would remain "cautiously optimistic".
"This is just wonderful to see, but we do have to keep one hand behind our backs with our fingers crossed when we come to work tomorrow."
BHP Billiton rose $2.30, or 8.75 per cent, to $28.60, while rival Rio Tinto added $6.54, or 9.24 per cent, to $77.32.
Energy stocks were significantly stronger, after oil prices rose overnight to end a four-day losing streak.
Woodside Petroleum gained $4.91, or 12.84 per cent, to $43.15, Oil Search rose 59 cents, or 15.9 per cent, to $4.30 and Santos lifted $1.25 to $13.95.
On Wall Street overnight, a last-minute dive wiped out earlier market gains following the Federal Reserve's half a percentage point interest rate cut to stimulate the US sluggish economy.
The Dow Jones Industrial Average fell 74.16 points, or 0.82 per cent, to close at 8,990.96.
At 1630 AEDT, spot gold was trading in Sydney at US$767.85 an ounce, up US$18.65 on yesterday's close of US$749.20.
Among gold miners, Lihir Gold gained 33 cents, or 19.19 per cent, to $2.05, Newcrest Mining rose $1.82, or 9.73 per cent, to $20.52, while Newmont Mining dropped one cent to $3.85.
Most of the big banks closed stronger, with National Australia Bank up $1.13 to $24.19 and ANZ rising 32 cents to $17.56.
Commonwealth Bank dropped 11 cents to $40.19.
Making news, Westpac has increased full year cash earnings by six per cent on strong loan and deposits growth, ahead of completing its takeover of St George Bank.
Westpac added four cents, or 0.2 per cent, to $20.30, while St George lifted 70 cents to $27.00.
In the retail sector, Woolworths added $1.12, or 4.25 per cent, to $27.49, Coles owner Wesfarmers rose $1.29, or 6.62 per cent, to $20.79 and David Jones added 16 cents to $3.22.
Among media stocks, Fairfax lost two cents to $1.92, News Corp rose five cents to $13.63 and its non-voting stock was steady at $13.55.
Energy company AGL will sell all of its gas and oil exploration and production assets in Papua New Guinea to an unidentified international buyer for a net $1.1 billion.
AGL gained 15 cents to $13.90.
Origin Energy said it had completed its transaction with US energy giant ConocoPhillips to form a CSG to LNG joint venture, and has received US$5 billion (A$7.49 billion) as an upfront payment.
Origin added 28 cents to $15.70.
Steelmaker Bluescope Steel reported underlying net profit of approximately $430 million in the first quarter, but forecast a challenging second half of fiscal 2009.
Bluescope rose 34 cents, or 8.4 per cent, to $4.39.
The most traded stock by volume was Brisconnections Unit Trusts, with 119.3 million units changing hands worth $161,391.
Brisconnections securities were down 0.2 cents at 0.1 cent.
Preliminary market turnover was 1.65 billion shares, worth $5.26 billion, with 659 stocks up, 354 down and 281 unchanged.
- AAP