Aussie market closes over 2pc up

MELBOURNE - The Australian share market has finished almost two and a half per cent stronger at a fresh 11-month high on Wednesday, with solid gains across the board amid higher oil and commodity prices.

At 1615 AEST, the benchmark S&P/ASX200 index was up 110.1 points, or 2.42 per cent, at 4650.4, while the broader All Ordinaries rose 105.6 points, or 2.32 per cent, to 4652.8.

Both indices advanced to their highest level since October 3, 2008.

On the Sydney Futures Exchange, the September share price index contract gained 100 points to 4647, on a volume of 69,317 contracts.

Patersons Securities associate director John Curtin said a weaker US dollar continued to buoy oil and commodity prices overnight, with crude oil advancing three per cent and copper and aluminium prices lifting one per cent.

"The currency is higher again, so you're seeing continued fund flows into Australia," he said.

"So you're seeing a weaker US dollar, which is pushing up commodity prices and commodity-related currencies and that money is looking for a home.

"And the homes are definitely BHP, Rio and Woodside, and flowing through to the other financial stocks across the board."

BHP Billiton closed up 75 cents, or 1.96 per cent, to $39.00 after the world's largest miner began briefing the market on its pricing policies.

Rio Tinto gained $1.20, or 2.03 per cent, to $60.18.

Mr Curtin said oil stocks were the standout performers.

"And you've got the underlying theme of the Gorgon development, so stocks like Woodside Petroleum, a major LNG exporter ... is up five per cent today," Mr Curtin said.

Woodside Petroleum gained $2.32, or 4.78 per cent, to $50.82, while Oil Search added 15 cents, or 2.4 per cent, to $6.40 and Santos climbed 29 cents, or 1.9 per cent, to $15.54.

By 1623 AEST major gold stocks had jumped over three per cent as the spot price of gold in Sydney climbed to a record high.

The spot price of gold in Sydney reached US$1014.98 per fine ounce, up US$18.28 on Tuesday's closing price of US$996.70.

Lihir Gold surged 14 cents to $3.15, while Newcrest Mining jumped $1.49 to $34.95 and dual-listed Newmont Mining Corporation gained 16 cents, or three per cent, to $5.49.

Australia's major lenders advanced on the back of stronger US retail sales that produced a positive Wall Street lead, Mr Curtin said.

"The financials are getting good support on the back of the US market consolidating."

Commonwealth Bank jumped $1.89, or 4.06 per cent, to $48.40, ANZ Banking Group gained 74 cents, or 3.35 per cent, to $22.83, National Australia Bank put on 90 cents, or 3.2 per cent, to $29.05 and Westpac Banking Corporation added 75 cents, or 3.15 per cent, to $24.55.

Investment group Macquarie Group jumped $1.96, or 3.98 per cent, to $51.20.

Shares in Telstra also surged 13 cents, or 4.18 per cent, to $3.24 after over 211.7 million shares were traded.

The telco's shares rebounded after $2 billion was wiped from its value on Tuesday after the federal government announced it planned to break up the company.

Analysts now predict changes to the business could actually improve shareholder value.

By 1637 AEST retailers were mostly stronger, with Pacific Brands leaping 5.5 cents to $1.185, Woolworths gaining 46 cents to $28.82 and David Jones up eight cents to $5.58.

Fairfax Media led the media sector higher, putting on 5.5 cents to $1.675.

News Corporation firmed 28 cents to $16.36 while its non-voting scrip gained 22 cents to $14.10.

Australian Mines Ltd was the top traded stock by volume, with 299.1 million shares changing hands for $323,486 and leaving the share price steady at 0.2 cents.

Preliminary national turnover reached 3.67 billion shares, traded for a value of $7.27 billion, with 754 stocks up, 379 down and 340 steady.

- AAP