Australian shares rallied 1.65 percent on Monday after US President Barack Obama announced a breakthrough deal to increase the country's debt ceiling and avoid a default that would have sparked global chaos.
The benchmark S&P/ASX 200 closed 73.2 points higher at 4,497.8 and the broader All Ordinaries gained 72.6 points to 4,573.1 after Obama unfurled a last-minute deal with Congress to resolve the debt deadlock.
"Gains for the day have been the result of a last minute bipartisan deal between Democrats and Republicans to lift the US debt ceiling and avoid a catastrophic default,' said IG Markets analyst Ben Potter, describing it as a "relief rally".
"For today at least, investors are just happy we seem to have averted an apocalyptic event," he added.
The heavyweight resources, financial and energy sectors led the charge, each up by about two percent.
As a result of the deal, analysts say, the Australian dollar could rally.
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