Broad-based gains pushed Australian shares higher on Monday, as plans to gradually reopen the country's most populous state after a weeks-long coronavirus lockdown boosted hopes of a pick up in economic activity.
The S&P/ASX 200 index <.AXJO> rose 1.3% to 5,461.2 points. The index marked its third straight weekly gain on Friday as Australia eases social distancing restrictions, which have taken a devastating toll on the economy and put it on course for its first recession in three decades.
In the latest move to ease lockdowns, New South Wales - home to Sydney - will allow restaurants, playgrounds and outdoor pools to reopen by the end of the week after extensive testing showed a sharp slowdown in the spread of new infections.
Financial stocks <.AXFJ> advanced 1.2% and underpinned the rally. Three of the country's "Big Four" banks rose between 0.5% and 0.9%.
Macquarie Group <MQG.AX> hit a near two-month high as brokerage Jefferies raised its price target for the stock, even after the investment bank reported dismal full-year results last week.
Broader sentiment was also helped by moves by some European countries to ease virus restrictions, although South Korea and Germany reported a rise in new cases.
Increasing optimism that lifting lockdown measures will boost economic activity helped markets, said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking.
Export-oriented mining stocks <.AXMM> gained 1.1%, with index heavyweights BHP Group <BHP.AX> and Rio Tinto <RIO.AX> firming 0.6% and 1.4%, respectively.
Gold stocks <.AXGD> gained on the back of higher bullion prices, as the country's biggest listed gold producer Newcrest Mining <NCM.AX> advanced 0.7%.
Spot gold <XAU=> rose 0.25% to $1,707.30.
"Gold held higher ground and short-dated bonds continued their rally, suggesting some investors are seeking higher levels of capital protection," McCarthy said.
Energy stocks <.AXEJ> were higher even as oil prices declined. Gas producer Woodside Petroleum <WPL.AX> and petrol station operator Caltex Australia <CTX.AX> rose 2.4% and 2.7%, respectively.
Brent crude <LCOc1> futures fell 1.65% to $30.46 a barrel while U.S. West Texas Intermediate (WTI) crude <CLc1> lost 1.86% to $24.28 per barrel.
The number of issues on the ASX that advanced were 1,105 while 551 declined as a 2-to-1 ratio favoured advancers.
New Zealand's benchmark S&P/NZX 50 index <.NZ50> ended 0.6% higher at 10,760.29 points, helped by gains in the financial and industrial sectors.
(Reporting by Soumyajit Saha in Bengaluru; Editing by Aditya Soni)
