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PERTH - The Australian share closed up more than five per cent, led by resource and banking stocks, boosting the value of all stocks on the bourse by $37 billion.
The domestic market followed the lead of Wall Street and British equity markets that rallied overnight after the
US government announced a rescue of ailing banking giant Citigroup.
The benchmark S&P/ASX200 index soared 198.3 points, or 5.79 per cent, to 3,623.4, while the broader All Ordinaries index jumped 186.6 points, or 5.51 per cent, to 3,575.4.
On the Sydney Futures Exchange at 1618 AEDT, the December share price index futures contract was up 164 points to 3,620 points on volume of 37,535 contracts.
IG Markets research analyst Ben Potter said eight out of 10 sectors were in the black, led by the materials, energy, financials and consumer discretionary sectors.
The big diversified miners had large gains, with BHP Billiton up $2.84, or 12.15 per cent, to $26.22, while takeover target Rio Tinto advanced $4.10, or 6.86 per cent, to $63.90.
"Interestingly, Rio Tinto was downgraded overnight from a buy to hold by ING Groep NV in Europe," Mr Potter said.
"It noted that an increased risk of debt default and difficulties in meeting asset sales targets as the main reason for the downgrade."
Among banking stocks, Commonwealth Bank was the top performer, up $3.78, or 12.51 per cent, to $34.00, National Australia Bank found $1.07, or 5.69 per cent, to $19.87, ANZ gained $1.65, or 12.79 per cent, to $14.55 and Westpac lifted $1.33, or 8.06 per cent, to $17.83.
Energy stocks leapt higher following a nine per cent jump in oil prices overnight.
Australia's second largest oil and gas producer, Woodside Petroleum, was up $3.43, or 11.41 per cent, to $33.50, Santos appreciated $1.56, or 12 per cent, to $14.56 and Oil Search put on 28 cents, or 6.26 per cent, to $4.75.
"Overnight, gold gained for the fourth straight session, up 3.5 per cent in New York on a weaker US dollar, safe-haven buying and gains on global equity markets," Mr Potter said.
At 1628 AEDT, spot gold in Sydney was trading at US$812.75 an ounce, up US$21.15 on yesterday's local close of US$791.60.
Gold mining stocks were stronger. Newcrest gained $1.85, or 7.84 per cent, to $25.45, Newmont advanced 31 cents, or 6.92 per cent, to $4.79 and Lihir Gold rose 10 cents, or 4.69 per cent, to $2.23.
Australia's third largest diversified miner, OZ Minerals, said it was deferring development projects, cutting costs and production and had begun talks to refinance debt as falling commodity prices took their toll on the company.
Despite this, shares in OZ Minerals were up three cents, or 5.77 per cent, to 55 cents.
Solomon Lew's Premier Investments Ltd said it was expanding its Just Group retail chain, despite "extraordinary times" for retailers brought about by the economic downturn.
Premier Investments' shares were 15 cents, or 4.64 per cent, stronger at $3.38.
National carrier Qantas on Tuesday lowered its annual profit forecast and will again cut capacity, as the global downturn hurts demand for air travel.
Its shares fell seven cents, or 3.03 per cent, to $2.24.
Among the retailers, Harvey Norman shares were down 20 cents, or 8.2 per cent, at $2.24 after saying its profit before tax for the first quarter of its fiscal 2009 is likely to be 31.5 per cent lower than the previous corresponding period.
Fellow retailer David Jones says it plans to open three new department stores and refurbish three of its existing outlets, which should begin to deliver financial benefits from fiscal 2012.
Shares in David Jones fell two cents to $2.50.
Supermarket giants Woolworths was steady at $25.00 and Coles owner Wesfarmers gained 64 cents, or 3.37 per cent, to $19.64.
Among media stocks, Fairfax fell four cents, or 3.01 per cent, to $1.29, while News Corp put on 67 cents, or 6.39 per cent, to $11.16 and its non-voting scrip was up 57 cents, or 5.64 per cent, to $10.67.
The most traded stock was OZ Minerals with 120.19 million shares changing hands worth $66.63 million.
Preliminary market turnover was 1.53 billion shares, valued at $5.43 billion, with 665 stocks up, 320 down and 285 unchanged.
- AAP