The Australian sharemarket has continued its surge higher on the back of renewed investor confidence around the recovery of the United States economy and as oil prices rebound.
The benchmark S&P/ASX200 jumped 1.9 per cent, or 103.4 points, to 5442. The broader All Ordinaries lifted 101.4 points, or 1.9 per cent, to 5414.1.
This follows Friday's session, which saw the ASX200 surge 2.5 per cent, the biggest one-day jump in a year and half. Since the market opened last Wednesday, Australia shares have pushed 5.6 per cent higher, with more than $83 billion of market capitalisation added.
Global equity markets have been rallying strongly since the US Federal Reserve, last Thursday, shrugged off concerns that a global slowdown could impact the recovery of the American economy, which remains on track, and implied official interest rates will rise next year on its terms. But the Fed also assured investors that rates wouldn't rise too fast.
Locally, a number of economists are now expecting the Reserve Bank of Australia to cut rates next year as the economy struggles with falling commodity prices, forecasting up two rates cuts, which would take the official interest rate to 2 per cent.
All sectors were up on Monday; energy surged 4.1 per cent and materials rose 2.6 per cent.
"If you're going to call this a Santa Claus rally you couldn't have anything more descriptive," Macquarie Bank division director Martin Lakos said.
"That's a strong rebound, particularly when there had been a lot of nervousness around the volatility of the oil price. I think what we're seeing here is confidence because of the reaffirmation by the US central bank on how they're continuing monetary policy."
High yield stocks were favourites among investors on Monday, with Commonwealth Bank hitting a record high, adding 2 per cent to $85.35. Telstra pushed to the $6 mark, a 13-year high, rising 1.9 per cent.
The rest of the big banks performed well too; Westpac gained 1.6 per cent to $33, ANZ added 1.3 per cent to $32.09, and National Australia Bank ended 1.6 per cent higher at $33.19.
Energy stocks also had a strong run on Monday, rebounding from what Mr Lakos said were heavily oversold positions.
Santos shares surged 6.4 per cent to $8.50, Oil Search shares lifted 5 per cent to $8.06 and Origin Energy shares rose 3.3 per cent to $11.89.
Among the big miners, BHP Billiton finished 3 per cent stronger at $29.84, Rio Tinto jumped 2.6 per cent to $57.73 and Fortescue Metals surged 5.5 per cent to $2.69. The smaller miners also had some spectacular gains, with Arrium surging 25.8 per cent and BC Iron gaining 8.3 per cent.
In corporate news, shares in outdoor clothing retailer Kathmandu plunged 21.6 per cent to $2.07 after issuing a profit warning thanks to Christmas sales coming in softer than last year. Kathmandu said it will experience a "substantial reduction in the gross profit earned in the pre-Christmas Day trading period in FY14."
Fairfax Media shares added 1.8 per cent to 84.5¢, after the company announced it would merge its radio network with Macquarie Radio's and announced the sale of of 96FM to APN News & Media. APN shares lifted 5.4 per cent to 78¢.
Spanish group Ferrovial Services walked away from takeover talks with Transfield Services after the rejection of a revised $2 per share offer. Shares in Transfield plunged 4.8 per cent to $1.705.
Coles was ordered to pay $11.2 million in penalties and fees after the Federal Court of Australia upheld a watchdog ruling over supplier mistreatment. The Australian Competition and Consumer Commission said the Wesfarmers supermarket brand pressured small suppliers rebates back to Coles. Wesfarmers shares finished the day up 1.5 per cent to $41.94.
