THE Australian sharemarket closed at a seven-day high yesterday.
The local market took off after Wall Street surged earlier on signs of life in the US economy and optimism over US earnings reports and bank stress tests in Europe.
Stronger than expected Australian employment data added to the bullish tone.
The S&P/ASX 200 index closed up 102.1 points, or 2.4 per cent, at 4356.7 on moderate volume worth $5 billion.
On Wall Street, the S&P 500 index surged 3.1 per cent, its third-biggest rise this year, after the biggest year-on-year rise in two months in the weekly ICSC/Goldman retail chain store index.
"Equity markets are bouncing from oversold territory and I think it will continue," said Macquarie Private Wealth director Martin Lakos. "Equities were discounting every possible worst-case outcome. We are now starting to see some of those concerns unwind, in terms of the stress testing of banks in Europe, US earnings and the US economy."
Financials led broad-based gains after their US peers had surged. ANZ Bank rose 4.3 per cent to $22.14, Westpac added 3.6 per cent to $22.02, National Australia Bank rose 2.9 per cent to $23.76 and Commonwealth Bank put on 2.7 per cent to $49.55.
In the property sector, Westfield rose 2.6 per cent to $12.49 and Lend Lease added 2.7 per cent to $7.50, while in financial services, AMP rose 2.3 per cent to $5.25 and Macquarie Group surged 6.3 per cent to $38.58.
In the mining sector, BHP rose 2 per cent to $38.16, Rio Tinto rose 1.8 per cent to $67.05, Fortescue jumped 4.1 per cent to $4.35, OZ Minerals was up 3.4 per cent to $1.07 and Newcrest rose 2.1 per cent to $34.18.
In the energy sector, Origin Energy rose 2.7 per cent to $15.08, Santos lifted 2.5 per cent to $12.76 and Woodside was up 1.9 per cent to $42.09, aided by a surge in crude oil to $US74.67.
Consumer staples were strong, with Foster's up 2.5 per cent to $5.76 and Wesfarmers up 3.8 per cent to $28.52. In consumer discretionary, Harvey Norman jumped 5.8 per cent to $3.65.
Among industrials, Leighton rose 3.2 per cent to $29.85 and Qantas rose 3.2 per cent to $2.28, while in health care, CSL rose 3.1 per cent to $33.25.
CMC Markets analyst David Taylor said global equities were showing growing signs of a base.
"The risk trade was back on today and withstood the threat of some mid-session profit taking," Mr Taylor said.
