The Australian share market has closed higher after an afternoon rally led by the materials sector.
The benchmark S&P/ASX200 index sat flat for much of Monday but a push in the final three hours of trade meant it closed 56.3 points, or 1.0 per cent, higher at 5658.3 points.
The broader All Ordinaries closed 54.1 points, or 0.95 per cent, higher at 5732.9 points, while the Australian dollar was buying 71.73 US cents at 1630 AEDT, from 71.93 on Friday.
The materials sector had been strongest throughout the day, propelled by the promise of capital returns to shareholders of mining giants BHP and Rio Tinto.
BHP closed 3.5 per cent higher at $33.53 after announcing it would pay a $US1.02-per-share special dividend in January, fulfilling its promise to return the money made from the sale of its onshore US shale assets.
Rio Tinto wasn't far behind, closing 2.2 per cent higher at $76.17 after completing the $500 million sale of its French aluminium smelter, freeing up cash it also has said would be returned to shareholders.
The afternoon surge, which came amid rumours of a budget surplus-inspired splurge by federal government and as Asian markets shrugged off Wall Street's heavy Friday losses, lifted every major sector except the financials - which closed flat.
ANZ led the losses, falling 1.6 per cent to $24.41, followed by Westpac's 0.9 per cent drop to $24.65, and NAB's 0.6 per cent fall to $23.55.
Commonwealth Bank was the only one of the big four banks to avoid the sell off, gaining 0.7 per cent to $69.26.
Even the long-suffering consumer-related sectors were infected with enthusiasm, with JB Hi-Fi, Myer, Woolworths, Coles, Treasury Wine Estates and Wesfarmers all enjoying a pre-holiday bounce.
Energy stocks jumped despite lower oil prices, while CSL, Fisher and Paykel, and Cochlear lifted the healthcare sector with gains of more than two per cent.
Shares in Perth-based shipbuilder Austal closed up 3.8 per cent at $1.93 after it was contracted to make another two combat vessels for the US Navy.
ON THE ASX:
* The benchmark S&P/ASX200 index was up 56.3 points, or 1.0 per cent, at 5658.3
* The All Ordinaries was up 54.1 points, or 0.95 per cent, at 5732.9
* At 1630 AEDT, the SPI200 futures index was up 60 points, or 1.07 per cent, at 5672
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 71.73 US cents, from 71.93 US cents on Friday
* 81.42 Japanese yen, from 81.63
* 63.43 euro cents, from 63.31
* 57.03 British pence, from 56.95
* 105.62 NZ cents, from 105.81
GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1236.83 per fine ounce, from $US1241.2 on Friday.
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